Healthcare Dive and the Wall Street Journal  report that

The Trump administration is sounding out the medical industry on requiring hospitals, doctors and other health care providers to publicly disclose the secretly negotiated prices they charge insurance companies for services, a move that would expose for the first time the actual cost of care.

The comment deadline is May 3 according to Regulations.gov.

This action if taken would be a lot more meaningful than the recently implemented rule requiring hospitals to post their chargemaster rates that hardly anyone pays. This action also could be very disruptive to health plan networks.  Per the Wall Street Journal —

Employers and patients, given clearer comparisons, might change their habits—though consumers often show limited inclination to shop for health-care services, even when they face significant costs under high-deductible health plans. “You can’t shop for care if you don’t know what the prices are,” said HHS’s Mr. Rucker. Once publicly available, patients may have the benefit of third-party technology companies aggregating the price data and building shopping tools that show the negotiated costs for services charged by various hospitals and providers.

To a certain extent though people already have this information in many circumstances. For example, the FEHBlog is currently receiving physical therapy. He can see what his health plan is paying the physical therapy clinic from the explanation of benefits. This action would give patients and health plan sponsors the pricing information  before the first visit.  The information aggregators, the apps, the new tools for employers, would create the genie in the bottle effect here. We shall see.

Following up on yesterday’s post, Govexec.com reports that stakeholders are rallying around President Trump’s decision to nominate Dale Cabaniss as permanent OPM Director. That bodes well for Senate confirmation of the nomination.

Food and Drug Commissioner Dr. Scott Gottlieb announced that he will be voluntarily leaving his position next month. Forbes discusses that unfortunate development here.

In other drug news,

• The Wall Street Journal reports that  “The Food and Drug Administration approved a controversial drug for depression that could be the first of a long-awaited wave of new treatments, but that has also raised concerns about abuse  The drug, a nasal spray that manufacturer Johnson & Johnson has branded Spravato, is a close chemical relation to ketamine.  * * * Studies have shown that ketamine can relieve symptoms of depression within hours, rather than the weeks it takes for traditional antidepressants to start having an effect. The FDA approved use of Spravato for patients with “treatment-resistant” depression, meaning those who have been unable to find relief from at least two treatments. J&J estimates about three million to five million Americans suffer from this condition.”
• The Chattanooga Times Free Press reports that prescription drug manufacturer Lilly “will introduce a version of the diabetes treatment Humalog that will be called Insulin Lispro and come with an initial price 50 percent lower than Humalog’s current rate of about $275 per vial. The company said it is working to make the insulin available as quickly as possible.”

Researchers looked at the impact of a program that rewards people who agreed to receive one of 131 elective procedures from a designated lower-price provider. The checks ranged from $25 to $500, depending on the price and service.  Over 12 months, prices paid for the targeted services dipped 2.1%, leading to $2.3 million in savings, or about $8 per person. The biggest effects were seen in MRI and ultrasounds, with no noticeable price drop in surgical procedures.

It’s a start.

And, Health IT Analytics reminds us that

Emergency department (ED) visits for people with at least one chronic condition contributed to nearly 60 percent of all annual visits in 2017 and $8.3 billion in spending, says a report from Premier. Of these visits, over 4.3 million were potentially preventable, suggesting that these patients need access to higher-quality primary care.  

Costly chronic conditions are only growing more prevalent as the US population ages, the report noted, and hospitals and health systems are increasingly facing financial pressures as the industry shifts to population health management approaches and value-based care.

Smarter use of primary care is the FEHBlog’s preferred strategy for lowering healthcare costs.

Finally Reuters reports that “The Trump administration is working on a new payment approach for treating kidney disease that favors lower cost care at home and transplants, a change that would upend a [high cost] dialysis industry that provides care in thousands of clinics nationwide.” Go get ’em.

The White House website reports that

Today, President Donald J. Trump announced his intent to nominate the following individual to a key position in his Administration: 

Dale Cabaniss of Virginia, to be the Director of the Office of Personnel Management for a term of four years. 

Ms. Cabaniss previously served as Chairman of the Federal Labor Relations Authority [2001-2008] and spent more than 20 years in the United States Senate overseeing civil service issues on the Committee on Governmental Affairs  [1993-1996] and the Committee on Appropriations [2010 – 2018]. Ms. Cabaniss earned her B.A. from the University of Georgia [1983] and J.D. from the Catholic University of America [1993].

OMB Deputy Director Margaret Weichert currently is serving as Acting OPM Director in addition to her regular day job. The nomination requires Senate consent.

Congress remains in session on Capitol Hill this coming week. Here is a link to the Week in Congress’s report on last week’s actions there.

Last week, OPM General Counsel Mark Robbins’ second job at the Merit System Protection Board ended when his term on that Board expired per the Federal News Network.  While OPM now has a full time general counsel, the MSPB now has no Board members, which of course is not Mr. Robbin’s fault.  The Senate needs to fill the empty slots. The MSBP hears federal employee disciplinary appeals and related federal employment issues. The appeals are first heard by administrative law judges. The administrative law judges are still working but there’s no one to hear appeals from the administrative law judge decisions.

The Wall Street Journal reminds us that

Bigger bills [for budget busting gene therapy drugs] aren’t very far off. Analysts expect a Novartis gene-therapy treatment for spinal muscular atrophy, which hasn’t yet reached the market, to generate $1.7 billion in sales by 2023. Novartis said at its investor day last year it believes the drug is cost-effective at a price tag of $4 million to $5 million per patient. Other drugs in development by smaller companies are expected to achieve similar sales over that time frame. Given the long lead times in drug development, tens of billions of dollars in market value is predicated on insurers covering gene therapies under development in much the same way that today’s medicines are. The perfect opportunity to rethink how medicine is paid for is here. But, should that be squandered, patients, insurers, investors, drug makers and the government could end up in a bitter battle over who will pay for these medical breakthroughs. 

How true.

Kaiser Health News reports that

Eight hundred hospitals will be paid less by Medicare this year because of high rates of infections and patient injuries, federal records show. The number is the highest since the federal government five years ago launched the Hospital Acquired Conditions (HAC) Reduction Program, created by the Affordable Care Act. Under the program, 1,756 hospitals have been penalized at least once, a Kaiser Health News analysis found. This year, 110 hospitals are being punished for the fifth straight time.

Here’s a link to Kaiser’s list of penalized hospitals.

P.S. This was the 2500th FEHBlog post.

Modern Healthcare reports that

Congress appears unlikely to delay the health insurance tax next year. If that happens, Medicare Advantage plans would see the biggest impact, analysts and insurers say. [The insurers participating in the FEHBP also get whacked too.]

On Wednesday, a bipartisan group of House lawmakers introduced a suspension of the tax, known as the HIT, through 2021. The tax was in place for 2018, suspended in 2019 and is due to take effect again in 2020. 

But as House lawmakers unrolled their proposal for another delay, senior congressional staff from both chambers and parties said they don’t think it’s likely to move before insurers start setting their ACA exchange rates next year.

This development is quite disappointing to the FEHBlog. As the FEHBlog has noted from time to time, the Affordable Care Act taxed everything that moved. Its most counterproductive taxes are those imposed on healthcare services and premiums, like this one, as those taxes significantly raise the cost of healthcare for consumers. In other words, the taxes make healthcare less affordable. Why Congress simply can’t repeal them is a mystery.

On the encouraging side, Becker’s Hospital Review reports that

Limited trust has existed between payers and providers thanks to disagreements over networks, prior authorization and price variation; however, now is the time to change this dynamic, executives from UnitedHealth Group, Anthem and Permanente Medical Group wrote in a JAMA opinion piece.

“Relationships should change from being based on contracts to relationships built on a shared covenant to patients and to system improvement,” the authors concluded. “The next decade could be transformational, or it could be a missed opportunity. It is the responsibility of each person and organization in the U.S. healthcare system to make transformation real — in care delivery, in payment, and most powerfully, in relationships.”

Amen to that.

Earlier this week, the Centers for Medicare and Medicaid Services announced updates to the Hospital Compare website. Although the website suggests that the site is designed for Medicare, the information is useful for anyone who is considering hospital care.  Healthcare Dive explains why the American Hospital Association is not a fan of the Hospital Compare website. In the FEHBlog’s opinion, your best bet if possible is to speak with professionals, especially nurses, who work at local hospitals where your admitting doctor is credentialed.

Nearly nine years ago, the Democrats in Congress supported by President Obama enacted the thousand page long Affordable Care Act.  At the time the U.S. had a patchwork of programs to provide coverage to various categories of Americans. Those government programs stood alongside the reliable employer sponsored market and the troubled individual market. Instead of combining the patchwork 90s era Children’s Health Insurance Program and the 60s era Medicaid program with the new exchange or marketplace created by the ACA (Medicare was too sacrosanct to be folded in) Congress added the new individual and small business marketplaces to the existing patchwork and chose to disrupt the reliable employer sponsored market including the FEHBP with a boatload of mandates / consumer protections.

Nine years later, a large cadre of Democrats in Congress including several Senators who are running for the  Presidential nomination for the Democratic party are pushing ahead with a proposal known as Medicare for All that ironically would repeal the Affordable Care Act in favor of a single payer program known as Medicare for All. No more employer sponsored coverage, no more FEHBP, no more Medicaid, no more CHIP. The healthcare providers would be put under heavier cost controls than Medicare currently imposes.

Medicare already imposes mandatory pricing on hospitals, doctors and other Medicare providers which shifts costs onto the private sector because the Medicare payments are so low. What happens when there is no private sector to receiving the cost shift? The bill whose text is not yet available would create regional hospital price czars.

In return, Americans would receive coverage that is known to be inadequate. Medicare coverage is not comprehensive. Its traditional hospital coverage is subject to a limited number of days per spell of illness. Most Medicare beneficiaries find it necessary to supplement Medicare coverage with private Medigap plans or purchase more generous Medicare Advantage coverage. It’s not clear how the bill would address this serious problem. In all Medicare for All is in the FEHBlog’s view a half baked idea at best.

The Senate Finance Committee held a high profile hearing on prescription drug pricing today. The witnesses inclu”ded seven prescription drug manufacturer chief execs. Fierce Healthcare has a good overview of the proceedings. The FEHBlog’s upshot — the current practice of prescription drug manufacturers negotiating rebates with Rx manufacturers is on its way out. Fierce Healthcare notes that “some insurers, including big names like CVS Caremark and Aetna, are taking steps toward a direct discounting model,” rather than wait for a government mandate. Smart move.

Modern Healthcare reports that “Preliminary data from the Medicare Payment Advisory Commission shows hospitals’ Medicare margins continue to decline, reaching their lowest point in 2017 in at least a decade. Even so, hospitals’ all-payer margins continued their upward trek. In aggregate, U.S. hospitals’ Medicare margin [preliminarily] was negative 9.9% in 2017, compared with negative 9.7% in 2016, according to MedPAC.”  These facts illustrate the extent to which hospitals shift costs onto commercial health plans, including FEHB plans. In the Medicare for All scenario, with the commercial plans gone, the hospitals and other providers will have nowhere to turn.

Modern Healthcare also observes that

For many years, the battle cry of healthcare cost warriors was, “Eliminate all those wasteful services.” More recently that evolved to, “Pay providers based on value rather than volume.” But there were always those who insisted the real problem was, “It’s the high prices, stupid.”

Now policymakers and experts who favor attacking price increases have gained momentum, with both congressional Democrats and the Trump administration pushing price-setting proposals. Their arguments are buttressed by growing research showing that rising prices for hospital and physician services and drugs are a major driver of increasing healthcare spending. 

The FEHBlog is no fan of government price controls, but he can see how we got here. As noted above Medicare and Medicaid shift millions of dollars of costs onto commercial health plans. The Affordable Care Act imposed price controls on insurers (but not providers), required health plans to pay tons of lower priced services and supplies, and took away from health plans the strongest tools they had to control provider prices — most notably lifetime and annual dollar caps on benefits.

Congress is resuming its work on Capitol Hill this week following the President’s holiday state work period.
‘
Healthcare Dive reports that according to a new Avalere report

• The number of hospital-acquired physician practices grew from 35,700 in 2012 to more than 80,000 in January 2018, and

• A hospital or health system employed about 25% of U.S. physicians in 2012. That percentage nearly doubled to 44% in 2018.

“Opioid overdose deaths climbed fastest in the District of Columbia, more than tripling every year since 2013. Eight states — Connecticut, Illinois, Indiana, Massachusetts, Maryland, Maine, New Hampshire, and Ohio — had opioid-related mortality rates that at least doubled every 3 years. Two states — Florida and Pennsylvania — had opioid-related mortality rates that at least doubled every 2 years. The increase in mortality rates in the east seemed driven primarily by synthetic opioids, which followed a distinctive geographic pattern across the country.”

• The Providence (RI) Journal reports on a recently rolled out United Healthcare policy focused on educating oral surgeons and dentists about the epidemic. 

“Sometimes overlooked in the opioid epidemic is the role played by dentists and oral surgeons, who often prescribe opioids for pain relief after removal of wisdom teeth and other procedures. A new campaign by UnitedHealthcare aims to raise awareness of this factor in the crisis — and offer advice to healthcare professionals and patients about alternatives to addictive drugs to ease discomfort.

Happy Washington’s Birthday.

The FEHBlog found a couple of interesting articles related to the CMS protection of healthcare costs discussed in last Wednesday’s Post. The editor emeritus of Modern Healthcare asserts that CMS is full of beans.

Over the past decade, CMS actuaries have consistently overestimated future healthcare spending. They failed to foresee the great moderation [in the rate of increase] that in fact took place [this decade]. Their latest projections should be viewed in that light. As the great sage Yogi Berra once said, “It’s tough to make predictions, especially about the future.”

Researchers in Health Affairs assert that

Currently, official statistics of the medical care sector only measure the number of goods and services consumed (for example, visits and prescriptions) and associated prices, while neglecting much of the quality changes of medical care treatments. Experts agree that factoring in the quality of treatment would lead to lower quality-adjusted price growth, indicating that consumers are getting more per dollar spent in this sector than current official estimates. A complete understanding of the growth trends in the medical care sector, as well as our overall economy, hinges on properly accounting for quality alongside costs. 

The FEHBlog has been intrigued by blockchain technology application in healthcare and other sectors.  MIT Technology Review cautions that

while blockchain technology has been long touted for its security, under certain conditions it can  be quite vulnerable. Sometimes shoddy execution can be blamed, or unintentional software bugs. Other times it’s more of a gray area—the complicated result of interactions between the code, the economics of the blockchain, and human greed. That’s been known in theory since the technology’s beginning. Now that so many blockchains are out in the world, we are learning what it actually means—often the hard way.

In relevant private sector health plan news —

• Becker’s Hospital Review reports that Walmart reduced the copayment for a telehealth visit in its employee health plan from $40 to $4 effective January 1, 2019. The FEHBlog thinks that this is a good call for a gap filler service like telehealth. 
• The Wall Street Journal reports that Jack Stoddard, the chief operating officer of the Amazon/Berkshire Hathaway/J.P. Morgan Chase joint venture to establish an innovative health plan for their employees “had testified that the venture will be deploying smaller-scale tests of ideas like making primary-care access easier, or maintenance drugs cheaper. If these ideas work, they could be scaled up among the venture’s owners. One goal is to bolster the importance of primary care, he said in the newly public testimony.” Makes perfect sense to the FEHBlog.

According to Healthcare Dive,

• National spending on healthcare is projected to grow 5.5% between 2018 and 2027, according to the CMS Office of the Actuary‘s annual report. This would outpace average projected GDP growth by 0.8%.

• This forecast means the healthcare segment of the U.S. economy would climb to 19.4% by 2027, up from 17.9% just two years ago.
• “While Medicare spending is expected to accelerate the fastest among payers and contributed to the increase, growth
  in health prices and disposable personal income are also significant
  contributors,” Andrea Sisko, an Office of the Actuary economist and
  author of the Health Affairs study, said.

Of course, Medicare spending will be accelerating as the Baby Boomer generation continues to age into that program.

The FEHBlog was intrigued by the Bank Security Info analysis of public comments submitted to HHS’s Office for Civil Rights in response to that agency’s request for suggestions for potential changes to the HIPAA Privacy Rule. Check it out.

Finally, Health Payer Intelligence reports that

Blue Cross Blue Shield (BCBS) Institute and Health Care Services Corporation (HCSC) have launched a health food delivery service that will help reduce food insecurity and health disparities for plan members. 

Called foodQ, the service will bring nutritious, affordable meals directly to people living in areas that don’t have adequate access to fresh foods that are part of a healthy diet, known as food deserts. Both organizations will offer easy access to healthy food that will improve health outcomes, particularly for diet-related chronic conditions. A goal will be to reduce avoidable emergency room visits and hospital admissions.

Foodq’s website further explains

The BCBS Institute partnered with Kitchfix, a leader in fresh-prepared local meal delivery, to bring foodQSM to nutrition deserts in Chicago [based on zip code]. Kitchfix is at the forefront of providing consumers with access to proper nutrition made from high-quality ingredients. Every week, their inventive chefs prepare delicious, ready-to-heat meals, which are delivered by their team for foodQSM. 

Innovative.