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.

A front page article on this weekend's Wall Street Journal questioned the profit levels available to carriers in Medicare Part D's prescription benefit program.  Generally speaking, price and cost of production are independent variables. Not surprisingly to the FEHBlog at least, the punch line to the article is that the carriers' pricing actions are legal, e.g., Congress needs to change the pricing methodology in the journalists' view.  In contrast, OPM zealously controls carrier profit levels in the FEHBP.

The Obama Administration sought to ram value based pricing down the throats of hospitals via mandatory bundled pricing for certain surgical procedures. The Trump Administration rolled back these program, but it has held the door open to reinstating them. Healthcare Dive reports that

The first two years of the mandatory Comprehensive Care for Joint Replacement (CJR) bundled payment model for hip or knee replacement saw a "modest reduction" of 3% in spending for those two procedures, according to a new study in the New England Journal of Medicine. 

Hospitals in the CJR model saw a larger decrease in spending per joint replacement episode than those in the control group. That reduction was caused by a nearly 6% drop in the percentage of episodes in which patients were discharged to post-acute care facilities.  The CJR facilities didn't see a significant difference in complications or percentage of joint replacement procedures for high-risk patients.

Is the juice worth the squeeze, as they say.