Monday update

Congress remains out of session this week.

The big news today is that Aetna is acquiring Coventry Health Care subject to standard anti-trust review and the approval of Coventry's shareholders. Both Aetna and Coventry offer HMOs in the FEHBP and Coventry also underwrites three employee organization sponsored plans. Here's a link to Aetna's investor presentation.

House minority leader Nancy Pelosi once said "we have to pass the [Affordable Care Act] bill so that you can find out what is in it." Business Insurance reports that employers are now learning about Section 1341 which creates a transitional reinsurance program for qualified health plans operating in the exchanges. Here's a link to a CMS presentation about the program. The provision, which HHS administers, requires health insurers and self-insured health plans to fund this program to the tune of $12 billion in 2014, $8 billion in 2015, and $5 billion in 2016, the last year of the program. According to Business Insurance,

Benefit consultants have made preliminary projections. Aon Hewitt, for example, estimates that the 2014 assessment will be in the range of $60 to $80 per health care plan participant, while Towers Watson & Co. puts the first-year assessment range at between $70 and $90 per plan participant. 

This is significantly higher than the $1 or $2 per participant fee imposed on insurers and self insured plan sponsors to fund the Patient Centered Outcomes Research Institute but less than the fee that the law imposes just on health insurers. The charge to the FEHBP in 2014 will range from $480 to $720 million.

Public health issues are difficult to identify, let alone address. The San Francisco Chronicle reports that declining male circumcision rates will cost health care costs to increase. The circumcision rate has dropped from 79% in the 1980s to 55% now. The lack of protection may boost U.S. health-care costs by $4.4 billion if rates plunge in the next decade to levels seen in Europe, where 10 percent of boys are circumcised, according to the analysis by health economists at Johns Hopkins. Each time a circumcision is avoided, $313 is added in direct illness- related expenses, after taking into account the cost of the procedure, [Aaron] Tobian [the study's senior researcher] said in a telephone interview.

An identified public health issue is patient non-adherence to prescriptions. The AMA News reports that

The Food and Drug Administration cleared the smart pill, called the Ingestion Event Marker, for marketing as a medical device on July 10. The ingestible sensor is the size of a grain of sand and can be integrated into an inert pill or an active medication. Fluid in the stomach activates the sensor and sends a signal through body tissue to a small, water-resistant patch worn on the torso. The patch detects when the pill is ingested and wirelessly sends that data to an application accessible by mobile phone or computer.

But the smart pill has skeptics according to the article perhaps because personal responsibility is such a key component to the solution. Interestingly the article also reports about a study looking at whether waiving prescription drug co-pays materially improves patient adherence. It doesn't. Isn't it more likely that you will adhere to the prescription if you have some skin in the game? But the key is taking a personal responsibility in your own longevity.