At this morning’s business meeting of the Senate Homeland Security and Governmental Affairs Committee, the Committee reported favorably Dale Cabaniss’s nomination to be OPM Director and Chairman Ron Johnson’s (R WI) bill to end the ACA’s multi-state program which OPM manages. There is currently only an Arkansas Blue Cross plan participating in that program.  For what it’s worth, the FEHBlog expects that Ms. Cabaniss will be confirmed as OPM Director within the month.

Becker’s Hospital Review discusses the Leapfrog Group’s Spring 2019 hospital patient safety ratings.

For the spring update, Leapfrog contracted with the Johns Hopkins Armstrong Institute for Patient Safety and Quality to update its mortality estimates linked to medical errors, infections and injuries at graded hospitals. Researchers found that patients treated at hospitals given a “D” or “F” safety grade face a 92 percent higher risk of avoidable death, compared to 88 percent for “C” hospitals and a 35 percent for “B” hospitals.

The Wall Street Journal reported today that

About 3.79 million babies were born in the U.S. in 2018, according to provisional data from the Centers for Disease Control and Prevention’s National Center for Health Statistics. That was a 2% decline from the previous year and marked the fourth year in a row that the number fell. The general fertility rate—the number of births per 1,000 women ages 15 to 44—fell to 59.0, the lowest since the start of federal record-keeping.

With the latest decline, births in the U.S. have fallen in 10 of the last 11 years since peaking in 2007, just before the recession. Many demographers believed that births would rebound as the economy recovered, but that trend hasn’t materialized.

The article adds that

“We see these continuing trends: births to older moms increasing, births to younger moms going down,” said Brady Hamilton, a statistician/demographer with NCHS who co-wrote the report.

The trends suggest that a decline in unplanned pregnancies is a big part of America’s lower fertility. Research led by Kasey Buckles, an associate professor of economics at the University of Notre Dame, found that about 35% of the fertility decline from 2007 to 2016 is because of declines in pregnancies that were likely unintended.

“It’s really remarkable, not something that we’ve seen over the last century,” Prof. Buckles said of the changing fertility patterns. 

Also

Abortion doesn’t appear to be responsible for the birth decline. The Guttmacher Institute found that both the total number and the overall rate of abortions have fallen to their lowest levels since around the time that Roe v. Wade legalized the procedure in 1973.

OPM Acting Director Margaret Weichert held a press roundtable today about the agency reorganization. Govexec and the Federal Times have reported on this event. Moreover, Govexec has shared an OPM document explaining the reorganization and the underlying rationale therefor.  Acting Director Weichert will be presenting her case for reorganization to the House Oversight and Reform Committee next Tuesday May 21.

The Health Affairs blog discusses a bipartisan proposal to fix the surprise billing problem (“with the notable exception of ambulance service”) that the House Energy and Commerce Committee unveiled today. “The [proposed] legislation achieves this objective by combining the following three components:

• Require the health plan to treat the out-of-network service as if it were in-network for purposes of enrollee cost-sharing, deductibles, and out-of-pocket limits;
• Set a minimum payment amount that the health plan must pay to the out-of-network provider; and
• Prohibit out-of-network providers from “balance billing” patients — that is, from billing the patient any amount above the patient’s in-network cost-sharing.

The New York Times offers an extensive article today on stem cell transplants used to treat joint problems.

Dr. Scott A. Rodeo, a surgeon and researcher at the Hospital for Special Surgery in New York, said the treatments were being studied there. So far, he said, “modest data” suggested that platelets might ease pain in arthritic or inflamed knees and elbows. “There’s great potential,” he said. “We are just not there yet. The marketing and use far outpace the science.”

For that reason, as explained in the article, health plans generally exclude these services from coverage.

MedCity News reports on the Food and Drug Administration’s biosimilar production guidance that was issued last week.

Knock-off versions of biotech drugs have been on the market for several years now, but one way that the US market for biosimilars has lagged behind its European counterpart is on the question of interchangeability of biosimilars with their reference products.

On Friday, the Food and Drug Administration issued a final guidance on interchangeability, meaning the ability to substitute one product for the other without a prescriber’s involvement, as is the case for generic pharmaceutical drugs. It’s a finalization of a draft guidance issued in January 2017.

Here’s a link to the FDA’s press release.

Healthcare Dive discusses a recent J.D. Power survey of consumer views on health plans.

The J.D. Power study shows overall health plan member satisfaction up seven points from the prior three years, to 713 on a 1,000-point scale. Fueling the increase is greater satisfaction with coverage and benefits offered.

By contrast, high copays and clunky mobile apps pulled member satisfaction down. “Overall satisfaction scores are 254 points higher when members perceive their plan actively keeps out-of-pocket costs low, helped coordinate care and that there was enough coverage, yet 54% or fewer of health plan members say their plan delivers on each of these criteria,” according to the study.

The report also shows people want lower-cost options such as telehealth, urgent care and retail clinics. Nearly half (48%) of respondents said they are very or somewhat likely to consider telehealth, and that share increased to 51% among Gen Y members. Among all members, about a third have used urgent care centers.

If you, like the FEHBlog, want consultant Avik Roy’s views on the RAND study on hospital prices that the FEHBlog discussed last week, then click here.  This is the upshot —

Austin Frakt of Boston University, at his blog The Incidental Economist, has for years compiled the research that has shown that “cost-shifting” is a myth:

Indeed, one recent study found that from 1995 to 2009, a 10 percent reduction in Medicare payments was associated with a nearly 8 percent reduction in private prices. Another study found that a $1 reduction in Medicare inpatient revenue was associated with an even larger reduction — $1.55 — in total revenue. This would be impossible if hospitals were compensating for lower Medicare revenue by charging private insurers more.

Private prices go down when Medicare rates go down: not the sort of thing that would happen if cost-shifting is real. What’s actually happening is something much simpler: monopoly exploitation.

The FEHBlog believes that the problem stems from Medicare cost shifting and monopoly exploitation.

On the bright side, CNBC reports that

One of the biggest investment opportunities over the next decade will be in companies working to delay human death, a market expected to be worth at least $600 billion by 2025, according to Bank of America analysts. The analysts say companies such as Illumina and Alphabet are on the cusp of “bringing unprecedented increases to the quality and length of human lifespans. 

Happy Mothers’ Day, readers.

Congress remains in session this week on Capitol Hill. Here’s a link to the Week in Congress’s report on last week’s actions on the Hill. As noted last week, the Senate Homeland Security and Governmental Affairs Committee plans to vote on Dale Cabaniss’s nomination to be OPM Director during a business meeting on Wednesday morning.

The Federal News Network reports on the state of the Postal Service’s effort to create a 10 year business plan as the House Oversight and Reform Committee requested last month. “Ultimately, the question is, what’s the role for your government-sponsored Postal Service in a 21st-century marketplace, and how are you going to fund it? So that’s a broad public policy discussion that we will continue to have with our public officials as well as other postal stakeholders,” [Postmaster General Megan] Brennan said to a group of reporters.  She said to expect the report to be issued in 45 days.

Employee Benefit News reports that Ocean Spray plans to stop charging employees co-payments for mental health care in order to improve access to that care, which is a concern that OPM raised in the 2020 call letter for FEHB benefit and rate proposals. Nothing in the rather complex federal mental health parity law prevents a plan from providing better benefits for mental health vs. medical care.

Willis Towers Watson issued a survey on employer sponsored health care in the U.S. last week.  The FEHBlog took note of the fact that

Nearly four in 10 employers (38%) are considering opening a health center at their workplace location to provide preventive, primary and urgent care by 2020 — a jump from the 26% that offer this today. Further, just over one in four employers (26%) plan to offer near-site health centers by 2020 — an even greater jump from the 8% that offer this today.

Employers are also expanding the types of care offered at health centers, adding mental health services, such as behavioral health counseling, in the next few years. Roughly half indicate they will offer onsite or near-site mental health services through the vendor managing the health center or through a community provider by 2020.

In the FEHBlog’s view, one of the major defects in the Affordable Care Act lies its focus on providing highly regulated health insurance, rather than on improving access to health care services. As a result you get stories like the Sunday Washington Post lengthy story today on a struggling hospital in rural Oklahoma. Employers are acting on the problem, why doesn’t Congress?  

The President released his approach to solving the surprise billing problem today. Principally

The Administration wants to ensure patients are not price gouged in emergency situations by out-of-network providers they could not choose. In emergency situations, balance billing for amounts above the in-network allowed amount should be prohibited. 

The Administration wants to bring transparency to the confusing and opaque pricing system patients face when scheduling care.  Before scheduling their care, patients should be given information about whether the care providers are out of their network and what related costs that may bring.

The FEHBlog’s preferred approach to emergency care is having each hospital require their affiliated providers to participate in the same networks in which the hospital participates.

Beckers Hospital Review reports that UniedHeathcare has rolled out a new bundled maternity care package.

The bundled payment program, launched with two healthcare providers in New Jersey and Texas, will reimburse care providers or a hospital for an episode of care — including prenatal, delivery and postpartum services — under a single payment. The bundled payments will link provider reimbursement to care outcomes.  The program, developed in partnership with healthcare provider organization U.S. Women’s Health Alliance, is slated to encompass up to 20 provider groups by the end of the year.

 Smart move.

The Senate Health Education Labor and Pensions Committee held a hearing on the 21st Century Cures Act on Tuesday.  Healthcare Dive provides a report on the hearing which considered the proposed HHS interoperability rule. The FEHBlog thinks that there good ideas in these rules which will help implement the President’s second no surprises principle stated above. However, HHS proposes to implement these technology driven changes way too fast, to wit, January 1, 2020. The Committee Chairman agrees:

“My major concern is to remind the administration of the advice that my piano teacher used to give me before a recital,” committee chairman Lamar Alexander, R-Tenn., said. “She’d say, ‘Lamar, play it a little slower than you can play it. You’re less likely to make a mistake.'”

Well put, Mr. Chairman. Also don’t bite off more than you can chew.

Modern Healthcare reports on a recent RAND study finding that employer sponsored health plans pay hospitals 241% more than Medicare for the same services.

“If you ask hospitals, they will pretty commonly say that ‘our prices are high because we lose money on Medicaid patients and barely break even on Medicare.’ But if you kind of look at the data, that story doesn’t hold up that well empirically,” said Christopher Whaley, one of the study’s authors. “Sometimes hospitals that can charge higher prices because of market clout, reputation or must-have status do so.” 

[Affordable Care Act driven] Consolidation among hospitals across the nation has helped boost their ability to negotiate higher prices from health plans, studies have shown. If employers and health plans participating in the study paid hospitals Medicare rates, they would have paid $7 billion, or about 50%, less over the study period, researchers concluded. 

AIS Health provides a useful article on the annual drug trend reports (including links) for three large prescription benefit managers — CVS Health / Caremark, Express Scripts and Prime Therapeutics. Check it out.

Fierce Healthcare reports that

Kaiser Permanente plans to roll out a new care network to more effectively connect its 12.3 million patients to the community services they need, such as housing, food, or transportation.

The health system is partnering with Unite Us, a social determinants technology and care coordination platform, to build the technology infrastructure that will enable Kaiser Permanente to better address social determinants and  “connect all the dots in a systematic way” for its millions of members, Kaiser Chairman and CEO Bernard Tyson told FierceHealthcare.

The initiative aims to equip all of Kaiser Permanente’s healthcare providers with technology tools to better address patients’ social determinants of health. The health system plans to start rolling out the network regionally this summer. The goal is to make the network available across its entire system within three years to serve the 68 million people in the communities it serves.

Bravo.

The Department of Health and Human Services finalized a federal rule today generally requiring prescription drug manufacturers to post prices in the consumer advertising shown on television. The accompanying fact sheet explains

• The rule will require direct-to-consumer television advertisements for prescription drug and biological products covered by Medicare or Medicaid to include the list price – the Wholesale Acquisition Cost – if that price is equal to or greater than $35 for a month’s supply or the usual course of therapy, with the prices updated quarterly.
• The 10 most commonly advertised drugs have list prices ranging from $488 to $16,938 per month or usual course of therapy. Patients deserve to know what a drug costs as they discuss their options with their doctor.
• The final rule will go into effect 60 days after it was published in the Federal Register.
• If a manufacturer simply includes price information in a direct-to-consumer advertisement as required by § 403.1202, that information in the advertisement will not require review by the FDA Office of Prescription Drug Promotion (ODPD). OPDP does not review price information in prescription drug advertisements and does not intend to do so in the future, unless the price information explicitly or implicitly incorporates safety or efficacy information about the drug, or makes express or implied claims about the safety or efficacy of the drug.

Sen. John Cornyn (R-Texas) offered specific examples of drugs that have benefited from system issues, including Humira, an expensive drug for arthritis and psoriasis that is protected by 136 patents.

That’s called a “patent thicket,” because it prevents a generic alternative from entering the market for more years — in this case, until 2023 for a drug first approved for use in the United States in 2002. “Is there anyone on the panel who’d like to defend the status quo?” he asked.

“There is no way a biosimilar can deal with a hundred patents,” testified Michael Carrier, a professor at Rutgers Law School. “This is an abuse of the system.”

Amen to that.

Celebrated New York Times health policy reporter Robert Pear died yesterday at age 69. Here is a link to his obituary in his newspaper.  RIP.

The Senate Homeland Security and Governmental Affairs Committee (“HSGAC”) held a confirmation hearing this afternoon for the President’s nominee for OPM Director, Dale Cabaniss.  FedScoop reports on the hearing here. The FEHBlog watched the hearing. It’s worth noting that Ms. Cabaniss, in contrast to the immediately preceding OPM Director Mr. Pon, is not interested in digitizing all of the personnel records in OPM’s Boyers PA cave.

Meritalk.com reports that the House Oversight and Reform Committee plans to grill the OPM Acting Director Margaret Weichert about the President’s plan to reorganize OPM on May 23. However, it is all together possible that on May 23 Dale Cabaniss will be the Senate confirmed OPM Director.  Time will tell.

The Chairman of the Senate HSGAC, Sen. Ron Johnson (R Wisc)  is taking another shot at repealing the Affordable Care Act provisions creating the OPM-mananged multi-state program, which currently has one participating single state plan in Arkansas.  According to the press release, OPM is one of the groups supporting repeal.

The Wall Street Journal reports that a new Novartis curative gene therapy drug Zolgensma is expected to be priced at $2 million per course of treatment.

Gene therapies target diseases that result from a faulty gene by introducing a working version into the body. They are attracting interest, both for their ability to cure otherwise devastating illnesses in one treatment and also for their high cost. Luxturna, the only gene therapy on sale in the U.S. so far to treat a form of inherited sight loss, costs $850,000 a patient. 

“A therapy is useless if no one can afford it,” said Cathryn Donaldson, a spokeswoman for America’s Health Insurance Plans, an industry association. She said members want to encourage innovation but that high prices are a problem.  The issue is gaining in importance as more gene therapies go on sale. The Food and Drug Administration expects to approve 10 to 20 gene and cell therapies a year by 2025.

The Centers for Disease Control issued a timely report on maternal deaths in the U.S. which is a topic in the 2020 OPM call letter for FEHB benefit and rate proposals.

In the merger and acquisitions world —

• Healthcare Dive reports on the status of Centene’s efforts to acquire Wellcare. 
• Healthcare Leaders reports on the upcoming court hearing on the CVS-Aetna merger. 

Happy Public Employee Recognition Week!

MobiHealth News reports that the National Institutes of Health celebrated the first anniversary of the All of Us public health res earch program, in which the FEHBlog participates, by unveiling its All of Us Research Hub. For more information on the All of Us program, click here.

The HHS Office for Civil Rights announced a $3 million HIPAA privacy and security rule violation settlement with Touchstone Medical Imaging.

In May 2014, Touchstone was notified by the Federal Bureau of Investigation (FBI) and OCR that one of its FTP servers allowed uncontrolled access to its patients’ protected health information (PHI).  This uncontrolled access permitted search engines to index the PHI of Touchstone’s patients, which remained visible on the Internet even after the server was taken offline. 

Touchstone initially claimed that no patient PHI was exposed.  However, during OCR’s investigation, Touchstone subsequently admitted that the PHI of more than 300,000 patients was exposed including names, birth dates, social security numbers, and addresses.  OCR’s investigation found that Touchstone did not thoroughly investigate the security incident until several months after notice of the breach from both the FBI and OCR.  Consequently, Touchstone’s notification to individuals affected by the breach was also untimely.  OCR’s investigation further found that Touchstone failed to conduct an accurate and thorough risk analysis of potential risks and vulnerabilities to the confidentiality, integrity, and availability of all of its electronic PHI (ePHI), and failed to have business associate agreements in place with its vendors, including their IT support vendor and a third-party data center provider as required by HIPAA.

The Wall Street Journal reports tonight that

As measles cases rose last week to a new high of 764 cases this year in 23 states, a battle is heating up in New York state over a proposal to tighten vaccination requirements for those attending schools. The new total is 60 cases more than a week ago, according to a weekly update from the Centers for Disease Control and Prevention. 

* * * 

Only three states—California, Mississippi and West Virginia—ban religious exemptions for immunization, according to the National Conference of State Legislatures. Legislators in several states have pushed in recent months to remove parents’ ability to claim religious, philosophical or personal exemptions for vaccination.

That’s a pendulum that needs to swing more in the public health protection direction, in the FEHlog’s view.

Congress remains in session this coming week on Capitol Hill. Here’s a link to the Week in Congress’s report on last week’s actions there.  On Tuesday afternoon, the Senate Homeland Security and Governmental Operations Committee will hold a hearing on the President’s nomination of Dale Cabaniss to be Director of the Office of Personnel Management.

Healthcare Dive reports from the American Association of Healthcare Journalists annual conference last week. Interesting observation:

The panel on the retail-ization of healthcare took time to address the elephant of the famously disruptive online retailer [Amazon], with Humana’s [Chief Medical Officer William] Shrank noting insurers were adopting strategies of retailers, but not their goals.  “The discussion of the retailing of healthcare has taken on a life of its own,” Shrank said. “Retail is about increasing consumption; we in healthcare want to reduce unnecessary consumption.”

In that regard, the Boston Globe has a front page article today on the extent of health insurance coverage of proton beam treatment for cancer.

While reading a Wall Street Journal editorial over the weekend, the FEHBlog ran across this useful Peterson Kaiser Health System Tracker.  Check it out.

Well it certainly has been Congressional Budget Office week at the FEHBlog. Yesterday, it was the CBO’s Medicare for All report. Today’s it’s the CBO’s updated report on the budget impact of the Administration’s proposed rule to eliminate prescription drug rebates in the Medicare and Medicaid effective January 1, 2020. It’s much more FEHB relevant read than the M4A report.

Yesterday, the States challenging the constitutionality of the Affordable Care Act and the federal government filed their briefs with the U.S. Court of Appeals for the Fifth Circuit. The FEHBlog shelled out $9 to download the principal briefs from both sides which are available at this link. The Fifth Circuit has accelerated oral argument to mid-July 2019 which presents the distinct possibility that the Supreme Court will hear and decide the case before the national election next year. In the FEHBlog’s view, the Supreme Court will take the case only if the Fifth Circuit sides with the the trial court’s decision that Congress’s decision to zero out the ACA’s individual mandate penalty brought down the whole law. In the FEHBlog’s opinion that the parties defending the law’s constitutionality have the stronger argument.

Sen. Charles Grassley (R NE) announced today that his Finance Committee will hold a hearing next week on the 2017 law popularly known as MACRA that changed the way that Medicare Part B pays doctors.

“I was pleased to support MACRA in 2015. It ended the perpetual cycle of Congress temporarily heading off cuts to Medicare payments to physicians under the flawed Sustainable Growth Rate system, and serves as proof that Congress can tackle big challenges in a bipartisan way. The legislation also reformed how Medicare pays by establishing incentives to reward physicians for providing the best possible care to seniors. This hearing will give senators a chance to hear about how those incentives have been implemented and how well they’re working. Hearing from physicians on the front lines of providing care will be especially helpful in determining what else Congress can do to achieve MACRA’s goals,” Grassley said.

The hear will be held next Wednesday May 8 at 10;15 am on Capitol Hill.

This Robert Wood Johnson Foundation announcement caught the FEHBlog’s eye.  The author who is concerned with rural health care, writes in pertinent part as follows:

At a time when we are trying to understand how ZIP codes influence our health and quality of life, rural people have lessons to share about what it takes to build equity and opportunity in their communities.

Here are lessons I’ve learned in my work with the Robert Wood Johnson Foundation:

• Work with and through local and regional intermediaries. When it comes to making change in rural communities, you have to start with the schools; community-based organizations; regional health centers; faith-based institutions; and small businesses. Small businesses, for example, play a vital role in rural America, creating roughly two-thirds of new jobs and supporting the economic and social well-being of their communities.
• Grow and engage leaders of different kinds and at different levels to get the work done together. This isn’t about another leadership training, but about finding champions in each community and helping them develop the skills they need to facilitate change. In Well-Connected Communities, volunteer leaders are helping their neighbors be healthier at every stage of life by coming together. In Athens, we are learning how to engage new messengers in small and big ways. At our quarterly Civic Saturdays, readers and speakers are strategically selected to bring new voice and experience to our civic rituals.
• Connect people within and across sectors and geographies for peer learning and collective action. When you bring a diversity of perspectives to the table, you are more likely to generate the right energy and strategy around the solutions rural communities need most. Within our own Rural Assembly, we represent a diversity of cultures, geographies, and ethnicities, as well as a diversity in interests and expertise for our hometowns and communities. These range from climate and energy solutions to creative placemaking initiatives, from economic transitions to restoring our democracy.
• Develop and strengthen the infrastructure for local, state, regional and national resource and information-sharing. Urban and rural boundaries are porous and our residents are itinerant; the roads leading in and out carry people, goods, and ideas without regard to ZIP code, making the futures of rural and urban places intertwined.