CDC Panel Approves Gardasil for 11 & 12 Year Old Girls

A U.S. Centers for Disease Control advisory panel has approved the practice of routinely immunizing 11 and 12 year old girls with the new HPV vaccine Gardasil. The panel also recommended that girls and women aged 13 to 26 should receive the vaccination on the advice of their doctors According to Medical News Today,

"Two HPV strains are responsible for causing 70% of all cervical cancers. Gardasil protects females from these two strains. It also protects against two other strains that are responsible for most genital warts. The treatment consists of three injections, spread over six months." The whole course costs $360, which reportedly is a high price for a vaccination.

Wellpoint, a large Blues organization, has already announced that it will begin Gardasil coverage. Gardasil is a Merck vaccine.

EBRI Tax Reform Study

It's well known that employer sponsored health insurance took off during World War II when the federal government's wage and price controls did not extend to "non-cash" benefits. Moreover, the federal tax code has excluded employer sponsored health insurance premiums from taxation. As part of the consumer driven health care movement, a number of policymakers, including the President's Advisory Panel on Federal Tax Reform, are recommending that the tax landscape which now continues to favor employer sponsored health insurance over individually purchased health insurance be levelled out. In fact, this in one component of the President's recent package of health savings account improvements.

The Employee Benefit Research Institute (EBRI) recently issued a report analyzing the four major reform proposals. EBRI observes therein (p. 26) that

"The assertion that the tax subsidy of employment-based coverage distorts
the market for health insurance and therefore creates an inefficient allocation of resources is based on the assumption that the tax subsidy is the only reason the market for health care services is inefficient. If there are other factors preventing the health care financing and delivery system from performing optimally, however, the “theory of second best” suggests that removing the tax incentive may not increase social welfare. Since health insurance coverage produces a number of positive external societal benefits, withdrawing the current tax incentive implicitly would suggest that individuals would obtain less-than optimal medical care. Currently, that incentive is provided through an employment-based system that has systemic efficiencies that an individual-based system would not be able to equal. "

Stolen VA Laptop Recovered -- Gov't Issues Security Standards

The stolen Veterans Affairs Department laptop and storage media with personal data on 26.5 million veterans has been recovered. The initial report is that the personal data was not accessed after the theft.

On a related note, the U.S. Office of Management and Budget issued standards for securing remotely held information, e.g., protected data stored on a laptop.

New Consumer Driven Health Plan Survey

Aon Consulting and the International Society of CEBS just released the results of a survey of 434 employers on the topic of consumer driven health plans (CDHPs). 28% of the surveyed employers offer CDHPs, up from 22% in 2005. 43% of the CDHPs offer health reimbursement arrangements (HRAs) and 48% offer health savings accounts (HSAs) -- a flip flop from 2005 in which 67% offered HRAs and 15% offered HSAs. Only 10% of the employers offering CDHPs gave their employees a choice of HSA or HRA down from 15% in 2005. The FEHB Program provides an HRA option for enrollees who cannot contribute to an HSA, e.g, due to Medicare eligibility.

Brave New World?

Yesterday's Wall Street Journal included a special section on senior living. I was intrigued by an an article by Sarah Lueck about the future of health care (subscription wall). The article described products designed to help seniors live in their homes as long as possible, such as as Accenture's online home medicine cabinet , the Personal Watcher, a wrist watch that monitors vital signs, and Motiva, an interactive TV / health platform by Phillips Electronics. Many of these products were demonstrated at a White House aging conference last year. Ms. Lueck points out that the the manufacturers still need to prove that their products are cost effective because at this point money as well as the lack of interoperability standards are major barriers to widespread adoption.

Interestingly, the article also discusses an Orwellian aspect to these products -- a theme which I find raised more frequently now in health information technology articles. That is another widespead adoption hurdle.

More than 1.1 Billion Served

According to a recently released National Center for Health Statistics report, "Americans made more than 1.1 billion visits a year to doctors' offices and hospital emergency and outpatient departments in 2004, up by 31% in the last 10 years." The study attributes the increase, in part, to an 11% population growth and a 19% per capita utilization increase.

Other interesting tidbits from the study include:

• "One-half of the 1.1 billion visits (48.1 percent) were to primary care doctors in office-based practices. The rest were to medical specialists (18.3 percent) and surgical specialists (16.0 percent) in office-based practices and emergency departments (10.0 percent) and outpatient departments (7.7 percent) in nonfederal general and short-stay hospitals.

• "Essential hypertension was the primary diagnosis recorded most frequently (42.1 million) at ambulatory care visits. Significant increases over the last 10 years were found for most of the leading primary diagnoses at ambulatory care visits including diabetes (up by 117%) and spinal disorders (up by 94%).

• "There was no change in the average time a patient spent face-to-face with a physician in office settings. The amount of time a patient waited before seeing a physician in the emergency department increased from 38.0 minutes in 1997 (first year collected) to 47 minutes in 2004."

Doctors' Income Drops

On June 22, the Center for Studying Heath System Change reported that the net income of doctors dropped 7.7% on average from 1997 through 2003. "'Flat or declining fees from both public and private payers appear to be a major factor underlying declining real incomes for physicians,'" said HSC Researcher Ha T. Tu, M.P.A, a study coauthor." Nevertheless, according to the study, medicine remains of one of the best paid U.S. professions (thanks to third party payers). This change may provide impetus for the various pay for performance programs that third party payers are implementing to incent quality and technology improvements.

House Health Week Delayed

The House of Representatives had been planning to hold its own Health Week this week. The apparent centerpieces of Health Week were the HIT bill ( H.R. 4157 ) and a bill implementing the President’s HSA improvement initiatives (H.R. 5262) – bills that would directly impact the FEHB Program. According to the Kaiser Health Report, the House also will be considering several other health care system related bills that don’t directly impact the FEHB Program.

As previously blogged, two House committees cleared different versions of HR 4157 and to make matters worse for proponents of HR 4157, the Congressional Budget Office has concluded that the bill, and in particular the ICD-10 mandate, would cost the Government money. Moreover, Rep. Eric Cantor (R VA) who sponsored the HSA improvement bill has now withdrawn it for retooling. Because it will take some work to resolve the issues with H.R. 4157, the House leadership has postponed its Health Week until next week.

More Zocor News

As noted in a June 18 post, Zocor, one of the statin heart drugs, goes generic this Friday, and its manufacturer Merck is fighting back. According to the Wall Street Journal and other press accounts, Merck negotiated with United Healthcare Group a Zocor price that is below the price that generic manufacturer Teva is charging for its generic equivalent to Zocor. United Healthcare will be treating cut rate Zocor as a Tier 1 drug with the lowest copay and the generic Zocor as a Tier 3 drug with the highest copay in its health plans.

In a letter to the Federal Trade Commission, Sen. Charles Schumer has accused Merck of foul play. It looks like competition to me.

The Hang Out Route

Judge Federico Moreno of the U.S. District Court for the Southern District of Florida has been presiding over the In Re Managed Care case, MDL No. 1334, for several years. It would cost over $45 at 8 cents a page to download the docket sheet from PACER. The case is a physicians class action against the major health insurance companies alleging improper reimbursement practices. Over the years, most of the defendants, including Aetna, CIGNA, Wellpoint, and Humana, settled. The holdout defendants were United Healthcare and Coventry Healthcare. Those companies' perserverance was rewarded on Monday when Judge Moreno dismissed the claims against them.

Whoops!

The Washington Post reports that an ING Financial Services agent's laptop computer was stolen from his southeast D.C. home last weekend. This laptop contained the unecrypted personal data, including Social Security Numbers, on 13,000 D.C. government employees and annuitants who had retirement accounts with ING. ING is taking remedial action including notifying the affected individuals and securing its other company laptops. Talk about closing this barn door.

OPM Pilots FSA Debit Card with GEHA

OPM announced last week that its flexible spending account (FSA) contractor SHPS is piloting a debit card for GEHA enrollees to use with their optional FSA. According to OPM, the FSA program has 7,600 GEHA participants, and "these pilot participants must continue to save all receipts so that SHPS, Inc., the FSAFEDS administrator, may verify expenses that can't be substantiated through paperless reimbursement. (For example, over-the-counter medicines.)" A good explanation of how these FSA debit cards work can be found here.

Sunrise, Sunset

On June 12, I blogged about a new Merck blockbuster diabetes drug called Januvia, which is awaiting FDA approval. It turns out that next Friday June 23 Merck will lose its patent protection on a current blockbuster heart drug, the statin Zocor ($4.4 billion in 2005 sales -- estimated zero dollars in 2007).

According to Forbes Magazine, the Israel based generic drug powerhouse Teva Pharmaceutical Industries expects to receive FDA approval of its generic version of Zorcor, known as simvastatin , later this month. Although Pfizer's patent on the best selling statin Lipitor ($13 billion in sales) does not expire until 2011, prescription benefit managers are expected to encourage switchovers from patent medications like Lipitor and Crestor to the generic version of Zocor, particularly in low risk patients. Indeed, a research company Decision Resources recently found that "primary care physicians and cardiologists expect to substantially decrease their prescribing of Lipitor when generic simvastatin is available in June 2006."

What's more, Pfizer's patent on the best selling anti-depressant drug Zoloft ($3.3 billion in 2005 sales) expires on June 30. A US subsidiary of Teva, Ivax, received FDA approval of a generic version of another best-selling anti-depressant Lexapro ($1.2 billion in 2005 sales) on May 23. However, Teva cannot market that generic until Forest Lab's patent on Lexapro expires in 2009 unless it wins its legal challenge to that patent.

Express Scripts, one of the major PBMs, issued a report earlier this month estimating that there are $20 billion in untapped generic drug savings.

New AMA Policies Announced

Two major OPM initiatives are requiring fee-for-service FEHB plans to adopt certain HEDIS quality measures and to provide price and quality transparency. The American Medical Association voted at its annual meeting this week to adopt these related policies:

"Patient adherence to treatment plans: The AMA voted to recognize that patient adherence to any medical treatment program is necessary in order to achieve high quality and cost-effective health care, and agreed to develop a list of resources to help physicians and patients optimize adherence.

"'For any health or wellness program to succeed, we must find ways to help patients follow through on treatment plans," said AMA President-elect Ronald M. Davis, MD. "The best health outcomes occur when the physician and patient work together toward a common goal.'"

"Health plan and insurer transparency: In support of consumer-directed health care and an end to the mystery of medical prices, the American Medical Association (AMA) today called on the health insurance industry to end efforts to conceal their pricing systems for medical services.

"Physicians at the AMA Annual Meeting agreed that patients need price transparency from all sectors of the health care system, but noted that pricing is largely outside of physicians' control. It is based on a complex array of factors that are controlled by health insurers and often imposed upon physicians. [Blog note -- That's rich. Health benefits are a more a price support for doctors than an insurance product -- will you be upset if you don't get a home owners insurance claim payment this year -- no, because that's real insurance covering a risk that you don't want to materialize. ]

"AMA pledged to take actions that would promote true price transparency, including calling on health plans to make their payment policies, claims edits, benefit plan provisions and fee schedules available for public viewing."

As I have said on the blog in the past, doctors have to bury the hatchet with health plans and work cooperatively to control health care costs. Improving patient compliance with doctor directions is a step in the right direction but refusing to recognize their role in the price setting process is a step back.

Surprise!

Both the House Energy and Commerce Committee (28-14) and the House Ways and Means Committee (23-17) reported out their respective versions of H.R. 4157, a health information technology promotion law. There are several difference between the two bills, the most significant of which from a health plan prospective is that the Ways and Means bill mandates implementation of the ICD-10 coding system in 2009 while the Energy and Commerce bill does not. The House leadership now will have to reconcile the two bills if they want to have a productive Health Week.

Supreme Court Ruling in McVeigh

The U.S. Supreme Court ruled today that federal courts do not have jurisdiction over an FEHB carrier's lawsuit to enforce its subrogation/reimbursement rights against an FEHB plan member. Empire Healthchoice Assurance, Inc. v. McVeigh, -- U.S. -- , No. 05-200 (PDF copy), affirming the Second Circuit's opinion. According to the majority opinion, written by Justice Ruth Bader Ginsburg, in this 5-4 decision, "Federal courts should await a clear signal from Congress before treating" these recovery cases as arising under federal law for purposes of federal court jurisdiction under 28 U.S.C. § 1331 (Slip op, p. 2). Justice Breyer, supported by Justices Kennedy, Souter, and Alito, wrote a strong dissent that makes perfect sense to me.

The Supreme Court soon will grant certiorari and remand the related Cruz case (No. 04-1657) back to the Seventh Circuit for reconsideration in light of McVeigh.

This is the first time that the Supreme Court has issued an opinion interpreting the FEHB Act, a statute that the Wall Street Journal's Law Blog described as "relatively obscure." (What does that say about my blog??)

Successful Hospital Care Improvement Campaign

The Institute for Health Care Improvement sponsors the 100,000 Lives Campaign to improve hospital care by implementing up to six evidence-based and life-saving interventions at participating hospitals. The Institute reported today that over the first 18 months of this program has avoided an estimated 122,300 deaths at 3,000 participating U.S. hospitals. What's more,

As a result of the Campaign, many patients have begun to enjoy a new standard of care. Over 20 facilities have reported that they have gone over a year without a Ventilator-Associated Pneumonia, a leading killer among all hospital-acquired infections, demonstrating that this sort of complication can be avoided and is not inevitable. Hundreds of hospitals have also now instituted rapid response teams, a relatively new concept that is saving lives. Participating hospitals have also made great headway in delivering reliable care for Acute Myocardial Infarction, preventing adverse drug events, and preventing surgical site and central line infections.

Now that's the Hippocratic Oath in action!

House Health Week Coming Up

The House of Representatives reportedly is planning to hold a health week beginning June 20. The marquee attraction may be H.R. 4157, the Health Information Technology Improvement Act of 2006. As noted in a prior entry, the Ways and Means Committee's health subcommittee reported out a version of the bill that mandated health plans to implement the new ANSI 5010 837 standard electronic claim in March 2009 and the ICD-10 diagnosis and inpatient procedure coding system in September 2009. (The full Committee has not scheduled a markup of this bill yet.)

AHIP urged Congress to delay ICD-10 implementation until 2012. On June 8, the Energy and Commerce Committee's health subcommittee reported out a different version of HR 4157, titled the Better Health Information System Act that does not include the ICD-10 mandate, among other differences between the two bills. (A victory for common sense.) The full Energy and Commerce Committee plans to mark up this bill tomorrow morning. It appears that the Energy and Commerce version of the bill has the big mo. (Meanwhile the medical community continues to question the financial and time investments required for HIT implementation.)

The Senate already has passed a bipartisan health information technology bill, S. 1418.

Medicare Part D -- 2007 and beyond

On May 15, the initial open enrollment period for Medicare's prescription drug program known as Medicare Part D ended. CMS reported a surge in enrollments before the open enrollment concluded. CMS also reported that the average Medicare Part D premium for 2006 is under $24 per month, significantly below the $36 benchmark price that CMS projected soon after the law was enacted.

Medicare Part D plans submitted their 2007 bids on June 5 (similar to FEHB plans which submitted their 2007 benefit and rate proposals on May 31). According to BNA, experts are predicting that 2007 Medicare Part D premiums will be 5% to 8% lower than 2006 premiums because the Medicare law provides for aggregate reinsurance to help Part D sponsors launch the new product. The thresholds for these "risk corridor" payments double in 2008 so plans may want to build enrollment in 2007. CMS is expected to announce the 2007 benchmark premium in August 2006.

New Blue Cross Blue Shield Transparency Program

On June 8, the Blue Cross and Blue Shield Association announced its new Blue Distinction program which, according to the Association, includes the following components:

• "Blue Distinction National Transparency Demonstration -- A national transparency demonstration by 17 Blue Plans ensures that we are providing consumers with the most effective ways to learn about absolute and relative healthcare costs.
  
  
• Blue Distinction Centers^{SM --} The Blue Distinction Centers identify quality providers of bariatric surgery, cardiac care and transplant services nationwide.
  
  
• Blue Distinction Provider Measurement and Improvement Program^{SM --} The Blue Distinction Provider Measurement and Improvement Program integrates provider performance metrics from public sources into a national framework for improving healthcare quality."

H.R. 4859 hearing

The Federal Workforce and Agency Organization subcommittee of the House Government Reform Committee held a second hearing today on H.R. 4859, the Federal Family Health Information Technology Act, which Chairman Jon Porter (R NV) and Rep. Lacey Clay (D MO) have sponsored. Chaiman Porter indicated that he plans to markup the bill soon.

New blockbuster drugs on the horizon

Diabetes cases have been surging in the United States and around the world. Pfizer will begin marketing an inhalable form of insulin called Exubera in July 2006. The short acting treatment will not entirely replace insulin injections. Analysts have predicated a $1 billion market for this drug and insurers are expected to place it in the highest copayment tier according to the Wall Street Journal's report (subscription wall).

Merck and Novartis meanwhile are reported close to FDA approval of a new class of drugs called a DPP-4 inhibitor to treat diabetes 2. (Diabetes 2 used to be called adult onset diabetes; except in severe cases it does not require insulin therapy. The name Diabetes 2 is now used because many younger people are contracting the disease due in part to to obesity problems. Diabetes 1 previously was called juvenile onset diabetes and always requires insulin therapy.) The DPP-4 inhibitors work to decrease blood sugar levels, rather than increase insulin production, the objective of current diabetes drugs.

Merck's drug is called Januvia and FDA approval is anticipated in the fall. Novartis's drug is called Galvus and FDA approval is expected next year. Both drugs could achieve annual sales over $1 billion according to the Wall Street Journal report.

What's more, Japanese researchers have announced a possible breakthrough in Alzheimer's Disease treatment -- a gene based vaccine that has worked on mice without causing the brain swelling problem that a previous experimental vaccine caused. Next step - monkey tests and then humans.

VA Security Breach Update

The Veterans Affairs Department's Secretary sent a letter to all veterans last week about the massive security breach caused by the theft of an employee's laptop. An enclosure to the letter explains that the Department is taking the following remedial measures:

The Department of Veterans Affairs is working with the President's Identity Theft Task Force, the Department of Justice and the Federal Trade Commission to investigate this data breach and to develop safeguards against similar incidents. The Department of Veterans Affairs has directed all VA employees to complete the "VA Cyber Security Awareness Training Course" and complete the separate "General Employee Privacy Awareness Course" by June 30, 2006. In addition, the Department of Veterans Affairs will immediately be conducting an inventory and review of all current positions requiring access to sensitive VA data and require all employees requiring access to sensitive VA data to undergo an updated National Agency Check and Inquiries (NACI) and/or a Minimum Background Investigation (MBI) depending on the level of access required by the responsibilities associated with their position. Appropriate law enforcement agencies, including the Federal Bureau of Investigation and the Inspector General of the Department of Veterans Affairs, have launched full-scale investigations into this matter.

More details on these remedial measures can be found in the testimony given before the House Government Reform Committee on June 8. Today's Washington Post features an interesting article about the wider impact that this security breach is having on employees who work at home (telework).

OPM Inspector General's Semi-Annual Report to Congress

OPM posts online the Inspector General's semi-annual reports to Congress as well as the agency's responses to these reports. If you are involved with the FEHB Program, this is always an important read.

FDA approves cervical cancer vaccine

The FDA has approved Merck's cervical cancer vaccine Gardasil for girls and women aged 9 - 26. The vaccine is administered three times over six months at a price tag of $360. On June 29, the Centers for Disease Control will consider whether to mandate the vaccine for girls aged 11 - 12. (The vaccine needs to be administered before the person becomes sexually active and potentially exposed to the virus that causes the disease). As the father of two daughters, I am very pleased by this news.

Citizen's Health Care Working Group

A provision in the lengthy Medicare Modernization Act established a Citizen's Health Care Working Group which is to make health care reform recommendations to Congress and the President. The Group just released its interim report recommending the Nation move to a universal health care financed by taxpayers by 2012. The Group is now accepting public comments on the report. I enjoyed reading the Galen Institute's comments.

National HIT Week Festivities Continue

As their contribution to National Health Information Technology Week, Sen. Sam Brownback (R-KS) and Representative Paul Ryan (R-WI) are introducing in the Senate and the House of Representatives an Independent Health Record Bank Act. The IHRB -- a concept created by Cerner Corp. -- would be a non-profit organization, similar to a credit union, regulated by the Commerce Secretary that would receive health record "deposits" from its customers. The bank would receive fees from customers and from the researchers to whom it would sell health data with the customer's permission.

What's more, the Center for Studying Health System Change released a study on the change in physician use of information technology for five clinical activities over the past five years.

According to the Center, "[t]he 2000-01 survey contains information on about 12,000 physicians and had a 59 percent response rate, and the 2004-05 survey includes information from more than 6,600 physicians and had a 52 percent response rate.

"Between 2000-01 and 2004-05, the proportion of physicians reporting access to IT for each of the five clinical activities grew by at least 5 percentage points. Changes in the proportion of physicians with access to IT for each of the clinical activities between 2000-01 and 2004-05 are as follows:

• Obtaining treatment guidelines grew from 52.9 percent to 64.8 percent.
• Exchanging clinical data with other physicians grew from 40.6 percent to 50.1 percent.
• Accessing patient notes increased from 36.6 percent to 50.4 percent
• Generating reminders grew from 23.6 percent to 29.3 percent
• Writing prescriptions increased 11.4 percent to 21.9 percent."

National HIT Day

I attended the National Health Information Technology (HIT) Day festivities held today at the Renaissance Washington hotel as part of a HIMSS summit conference. I heard four policymaker speeches.

The first speaker was Dr. Carolyn Clancy, the Director of HHS's Agency for Healthcare Research and Quality (AHRQ). Dr. Clancy believes that health care information technology will power health care transformation by increasing efficient care delivery, improving patient safety, and empowering consumers. She identified the organizing principle as quality and she said that we must use health IT to build an evidence base to tell consumers, payers, and providers which health care services and supplies work and what does not work. This should create a stronger, more transparent health care market.

Former House Speaker Newt Gingrich , who now leads the Center for Health Transformation, emphasized the need to set the right health information technology standards the first time -- standards that are market oriented, and will maximize innovation and adoption. Those standards should not be command driven but rather should be recognized to work in the real world by providing true interoperability.

Dr. David Brailer, vice chair of the American Health Information Community, informed the audience that HHS Secretary approved the AHIC workgroup breakthrough objectives on May 16 and that the ANSI Health Information Technology Standards Panel (HITSP) will create standards for these objectives by September 2006. Then it will be up to the federal agencies to use its procurement leverage and encourage rapid implementation of those standards by government contractors, thereby stimulating demand in the marketplace. Also in the late summer, the Certification Commission for Health Information Technology (CCHIT) will begin certifying HIT products. Business and technical processes must move together.

Dr. Mark McClellan, the Administrator of HHS's Center for Medicare and Medicaid Services, reported that critical mass around health information technology is coming together. He mentioned a May 23 Mathematica study on how six types of HIT are improving hospital quality of care. He is noted the health care provider community's argument that health plans not the providers will enjoy increased profitability from the improved quality created by health informaiton technology. He reported that CMS is working hard to pay more Medicare and Medicaid benefits for better quality of care and better outcomes. CMS has created several public-private quality alliances, such as AQA and the Medicare care management demonstration project, to create valid, consensus based quality measures. He also reported that by late summer 2006 HHS will issue final Stark Act regulations to encourage donation of health information technology.

VA Security Breach Spawns Class Action

The New York Times reports that five veterans' groups including the Vietnam Veterans of America have filed a class action against Veterans Affair Secretary Nicholson in the U.S. District Court for the District of Columbia. The veterans' lawsuit seeks the following relief:

• A declaratory judgment that the VA’s loss of these records violated and continues to violate both the Privacy and Administrative Procedure Acts.
• A court order that the VA disclose the exact nature of its compromised records system and to individually inform each veteran of every record it maintains on him/her.
• An injunction preventing the VA from altering any data storage system and prohibiting any further use of these data until a court-appointed panel of experts determines how best to implement safeguards to prevent any further breaches.
• A judgment awarding $1,000 to each veteran who can show that he/she has been harmed by the VA’s violation of the Privacy Act.
  

AHIP Releases ICD-10 Implementation Study

Health plans, in accordance with the HIPAA transaction and code set standards, use the International Classification of Diseases, 9th Ed, Clinical Modification (ICD-9-CM) to code diagnoses and inpatient procedures. Rep. Nancy Johnson's (R-CT) health information technology bill (HR 4157) would require health plans to implement the new ICD-10 code sets by October 1, 2009. This proposal has always struck me as very aggressive. Consequently, I was very pleased to read about AHIP's recommendation -- based on a detailed IBM study -- to delay ICD-10 implementation until 2012. AHIP's President explained that while AHIP's health plan members support the eventual use of ICD-10,

"This massive effort of moving from 24,000 to 207,000 codes calls for all health care stakeholders to completely rework operations for claims processing, provider contracting, medical management, quality reporting, information technology, disease management, and other business and health care activities. Planning for an adequate implementation period will help provide a smooth transition to the new codes by allowing for pilot testing that will help minimize unintended consequences for consumers, physicians and other providers without unnecessarily increasing administrative costs."

Let's hope that common sense prevails as the Health subcommittee of the House Energy and Commerce Committee begins its markup of the bill on June 8.

More on the VA security breach

The massive VA security breach just keeps growing. So far it has swallowed up the data analyst who lost the unencrypted data due to a home robbery and two of his superiors. According to the VA, there are no reports that the stolen information has been misused.

Abigail Alliance case update

I read with interest an op-ed in Saturday's Wall Street Journal by the Cato Institute's VP for Legal Affairs Roger Pilon applauding the D.C. Circuit's opinion in the "little noticed" Abigail Alliance case (which I discussed in aMay 30 post). Mr. Pilon explains that

"If there is a fundamental right to refuse life-sustaining treatment, as the Supreme Court had found in 1990, there is, equally, a right to seek life-sustaining medication free from government interference.

That's hardly pulling a right "out of thin air," as the Washington Post charged editorially in its defense of FDA bureaucrats. It is not the freewheeling stuff of Roe v. Wade, but rather the careful mining of Locke, Blackstone and Madison."

I don't often find myself agreeing with the Washington Post editorial page, but I do on this issue.
My concern with the Abigail Alliance decision is a practical public health issue best framed by the National Breast Cancer Coalition in a September 3, 2003, letter to the FDA commenting on the Abigail Alliance's petition:

"Public policy should discourage access to investigational drugs outside of clinical trials. Investigational treatments made available outside of clinical trials have the potential to undermine the clinical trials system. There is little incentive for a patient to participate in a clinical trial if she can obtain the investigational drug outside of the trial. This makes trial accrual difficult, and may significantly undermine the ability of the investigators to determine the efficacy and safety of the intervention. That was certainly the case with bone marrow transplant for breast cancer - because it was so widely available outside of clinical trials it was extremely difficult to accrue patients to trials, and it took many years longer than it should have to learn that the high-risk and expensive procedure provides no benefit to women with breast cancer.

"Investigational treatments are by definition unproven; even the most promising data in earlier stages of trials often do not hold up. Further, there may be significant safety issues that do not emerge until well into a phase III trial. For example, the cardiotoxicity of Herceptin was not apparent in the phase II data, but emerged in the much larger phase III trial."

I cannot imagine how the district court on remand could not find this public health concern to be a compelling government interest.

More on the OPM Legislative Proposal

In today's Washington Post, Steve Barr reports on OPM's legislative proposal to amend the FEHB Act to permit the Service Benefit Plan to offer a third option pairing a high deductible health plan with a health savings account. On a related note, the GAO recently released a report on consumer directed health plans (06-514) finding that enrollment in high deductible plans pairedwith a health savings account or a health reimbursement account grew from 3 million to between 5 and 6 million in 2005. This small but growing share of the market is driven principally by employer interest in controlling their health care expenses and in allowing employees a little skin in the game, as they say. The report indicates that a survey of large employers (over 1000 employees) that offered HSA options along side more traditional plans had 3% average enrollment in the HSA option (Report, p. 14). What's more five states -- Alabama, California, New Jersey, Pennsylvania, and Wisconsin -- still do not allow state income tax deductions for HSA contributions (p. 23). The GAO concludes that further growth in consumer directed plans will depend on many factors, such as changes in laws such as these that diminish interest in these plans, employer savings with these plans, and favorable employee experience with these plans.

Price Transparency News

As scheduled CMS yesterday started providing “Medicare payment and volume information is now available for common elective procedures and other common admissions for all hospitals. Information includes the volume and typical ranges of Medicare payments, by county, for 30 diagnostic related groups (DRGs), including heart operations and implanting cardiac defibrillators, hip and knee replacements, kidney and urinary tract operations, gallbladder operations, back and neck operations, and common non-surgical admissions. CMS expects that these and future data will be used to help consumers compare price, and with other available tools, quality, of common medical treatments.”

This is not like pulling a rabbit out of a hat because Medicare pricing is established by law, but it may be helpful to you and your members with primary Medicare coverage. As you can see, the current information is presented in a user-friendly format, but CMS has plans for a decision making tool.

The Galen Institute provides these interesting tidbits about the CMS data:

“The spreadsheet offers information for each state, each county in every state, and each hospital in every county for a variety of treatments they provided in 2005, including heart operations, hip and knee replacements, kidney and urinary tract operations, gallbladder surgery, and back and neck operations.

"One of the first things you notice is the huge discrepancy between the national averages of what the hospitals charge and what Medicare actually pays. [See yesterday's post about spiraling health care costs.] Medicare's payment is generally a third or less of the hospital charges. For example, Medicare's average payment, nationally, for a heart valve operation is $38,538, but the average hospital list price is $115,221.

“There also are big price differentials when you drill down into the data. CMS lists the ranges of Medicare payments by county, but hospital-specific pricing data is not yet available. You see that the valve replacement could cost as little as $26,600 in Schenectady, NY, but more than $68,000 in Hardin County, KY.

"CMS does list the number of procedures for each hospital - which is a good indicator of the hospital's expertise and consequently of more successful outcomes. From the data Medicare has published, you may be better off at Florida Hospital in Orange County with 177 heart valve replacements last year rather than Salina Regional Health Center in Kansas, with only 11."

Finally, I have read that White House health care advisor Roy Ramthun is resigning his office today. Mr. Ramthun lead the HSA implementation charge at IRS, and he spoke at the FEHBP Carrier Conference in 2004. More recently, he has been working at the White House on health care policy.

Spiraling Health Care Costs

Of course, the problem of spiraling health care costs in the U.S. has several sources, including aging demographics, obese population, etc. Yet I have argued that you can date the problem from 1982 when Medicare imposed price controls on inpatient hospital bills through its prospective payment / DRG system. The New York Times reports today that "Employers and consumers are paying billions of dollars more a year for medical care to compensate for imbalances in the nation's health care system resulting from tight Medicare and Medicaid budgets, according to Blue Cross officials and independent actuaries."

I am encouraged by the fact that

"Business leaders, health plans and groups representing hospitals and doctors plan to meet in July to review the report and make policy recommendations.

"Although many state budgets are overwhelmed by rising Medicaid costs, health care reforms intended to reduce the ranks of the uninsured that were recently enacted in Massachusetts and Vermont include more state money for Medicaid. Blue Cross Blue Shield of Massachusetts and Partners Healthcare, the largest hospital group in Boston, jointly supported the Medicaid increases.

"'That was a real-world example of hospitals and insurers seeing that the had common interests,' said Paul Ginsberg, a health economist who is president of the Center for Studying Health Systems Change, a nonprofit research group in Washington."

I hope that the medical professionals arguing for a single payer system take note of this study. There is no magic potion to cure this problem, but I have confidence that the provider and payer communities can tackle the problem if they work cooperatively. As the Health Data Management article (mentioned two posts below) points out, there are helpful elements in the payer's consumer driven health care strategy that tie in with the medical community's concern about chronic care expressed in the NEJM editorial mentioned one post below.

New England Journal of Medicine's take on Medicare Part D and Benefit Limits

This week's issue of the New England Journal of Medicine includes several articles on the new Medicare Part D prescription drug program, a point - counterpoint by the CMS Director Mark McClellan and Rep. Louise Slaughter (D NY) and a special study concluding that the Medicare Part D coverage donut hole kills (a bit of an exaggeration but all of these articles are freely available).

The Journal editorializes about this study in pertinent part as follows:

"The use of increased copayments or limitations on benefits in an attempt to control spending represents a misdiagnosis of what accounts for, and what is needed to address, the high and rising costs of health care. Any approach to creating better outcomes in health care must address the appropriate clinical treatment of chronically ill patients. Interventions to contain costs also need to address the rise in the prevalence of treated disease. A large component of the rise in health care spending is the increase in the rates of diabetes, back problems, and mental disorders associated with the persistent rise in obesity across virtually all age groups. Thus, controlling health care spending will require a strategy for the more effective treatment of chronically ill patients and for the slowing or halting of the increase in the prevalence of diseases such as diabetes.

"Instead of an approach driven by the redesign of insurance and benefits, control of spending will require the early identification of patients at risk and the appropriate payment of physicians to manage a patient's multiple chronic diseases according to evidence-based protocols. Providing better care for chronically ill patients under the Medicare program will require changes in policy. One approach would accelerate the use of the models of payment and delivery of care for chronic diseases that are under way in Medicare. A key unresolved issue concerning such an approach is how to get physicians to apply integrated models of chronic-disease care and how to get their patients to participate actively.

"The results of the study by Hsu et al. should encourage movement toward other approaches to the management of spending in Medicare and other health insurance programs. One such approach would involve a monthly payment to physicians so that they would take the time needed to work with patients and manage their multiple chronic illnesses. Simultaneously, cost sharing for clinically recommended care (e.g., annual eye examinations or measurement of glycated hemoglobin for patients with diabetes) should be waived to ensure higher rates of compliance. Indeed, a condition-specific cost-sharing structure should be in place for clinically recommended services for chronically ill patients. We should be reducing the barriers to treatment and encouraging patients to take appropriate medications for the recommended duration, rather than increasing these barriers by limiting benefits. As the findings of Hsu et al. highlight, the use of cost sharing and limits on prescription-drug benefits to control spending is counterproductive both medically and in the immediate attempt to limit spending.

"Effective strategies for reducing the level and growth of spending will need to rely on tools other than high-deductible plans and limits on benefits. With respect to the rise in spending, we need to address the rise in obesity head-on. Doing so will be neither easy nor likely to produce immediate results. However, the failure to include primary prevention and population-based approaches in the cost-containment tool kit will come at a price: a continued increase in obesity and in the prevalence of associated disease. "

Consumer Driven Health Care

I enjoyed reading this Health Care Data Management article which discusses various steps that health plans across the country are taking to improve consumer driven health care. I was impressed by Regence’s twist on the very popular myspace.com web site. Also Theresa Defino called to my attention this consumer survey on personal health records.

Hysterical

Check out this spoof on big law firm web sites developed by blogger Jeremy Blachman who has authored a book Anonymous Lawyer that will be published next month.