Weekend Update

Happy Holidays everyone. The lame duck Congress is in recess until Thursday December 27.  The new 113th Congress begins on January 3, just a week later. Congress did pass two bills last week - an amendment to the Improper Payments Act discussed in this Federal Times article and a defense authorization act discussed in this govexec.com article. These laws impact government contracts and FEHB plan carriers are government contractors.

Kaiser Health News reports that last week the Centers for Medicare and Medicaid Service  "disclosed bonuses and penalties for nearly 3,000 hospitals as it ties almost $1 billion in payments to the quality of care provided to patients." The changes take effect on January 1. Under the Affordable Care Act, Medicare reduced hospital payments by 1% which CMS reallocates based on quality assessments.

While every hospital is getting something back, almost half aren't recouping the 1 percent they forfeited and thus are net losers.

Seventy percent of the scores are based on how frequently hospitals followed 12 basic clinical standards of care, such as controlling heart surgery patients' blood sugar levels and giving them beta blockers to lower their blood pressure. The other 30 percent is determined by how well hospitals were rated by former patients in surveys asking about the communication and responsiveness of doctors and nurses and the cleanliness and quietness of their environment.

Medicare already publishes the scores for individual facilities on its Hospital Compare website. Hospitals were scored both on how well they performed compared to their peers from July 2011 through March 2012, and how much they improved over time.  

Standard and Poors announced last week

As measured by the S&P Healthcare Economic Commercial Index, healthcare costs covered by commercial insurance plans increased by 7.16% over the year ending October 2012, up from +7.09% reported for September 2012. Annual growth rates in Medicare claim costs rose by 2.41%, according to the S&P Healthcare Economic Medicare Index, up from +2.04% recorded in September 2012. The Professional Services Index annual growth rate was +6.63% in October 2012, up from +6.16% September print. The Hospital Index’s growth rate hit its seven-and-a-half year historic low of +3.83% in October from +3.86% recorded in September 2012. It was driven by the Hospital Commercial Index, which hit a new recent low with an annual growth rate of +4.78% - its lowest rate since October 2009. It posted +5.15% annual rate last month.

Cost curve up. Health insurers are trying to lower the cost curve. The Wall Street Journal reported last week about insurer initiatives to cover online and telephonic doctor visits in order to expand the availability of primary care coverage. "The virtual consults often cost around $40 to $45, which is much less than an ER visit and also cheaper than an urgent-care center or most in-person doctor visits."

OPM for the past few years has engaged the FEHBP in its anti-tobacco initiatives.  Last month, HHS unveiled its new anti-tobacco website called betobaccofree.hhs.gov  In good news, Reuters reported last week that teen smoking in the USA has reached a new low.

A front page article on the New York Times this morning discussed an encouraging drug research development. The article explains that

Normal healthy cells have a mechanism that tells them to die if their DNA is too badly damaged to repair. Cancer cells have grotesquely damaged DNA, so ordinarily they would self-destruct. A protein known as p53 that Dr. Gary Gilliland of Merck calls the cell’s angel of death normally sets things in motion. But cancer cells disable p53, either directly, with a mutation, or indirectly, by attaching the p53 protein to another cellular protein that blocks it. The dream of cancer researchers has long been to reanimate p53 in cancer cells so they will die on their own.

 Drug researchers are now trying to insert another molecule between the p53 protein and the protective protein so that the p53 protein can kill the cancer cell. The interesting aspect of this research is that a successful approach will treat several different forms of cancer, including both rare and more prevalent  forms of cancer.  So it's encouraging cooperation among the foundations that focus on cancers striking certain organs.

The article mentions that the treatment could help a retired postal clerk, likely an FEHBP enrollee. Unfortunately the article discloses in its last sentence that the clerk passed away before a human drug trial was initiated.