April 20: Health Care Reform News
Northeast Florida's hospitals wonder what the impact of new health care law will be
The health-care reform law’s insurance expansion seems like a blessing for many Northeast Florida hospitals, because it will sharply reduce the millions they write off in unpaid bills. But it may become a curse, analysts say…
In a statement issued in response to The Times-Union’s questions, the Mayo Clinic agreed. “Overall, the need for charity care will likely be reduced, but it is impossible to estimate by how much,” stated the clinic, which runs a hospital and clinic in Jacksonville, among other locations. “There will still be many people without insurance or with inadequate resources to pay deductibles and coinsurance.”
Florida Times-Union, by Jeremy Cox, 4/19/2010
Top stories
Obama Picks Donald Berwick of Harvard to Run Medicare and Medicaid
The Washington Post
April 20, 2010
President Obama formally announced Monday his nominee for administrator of the Centers for Medicare and Medicaid Services, fulfilling widespread expectations that he would tap Donald Berwick, a Harvard University professor and leading advocate for improving health-care quality and efficiency. Additional coverage: President Nominates Professor to Health Job, The New York Times
HHS Creates New Office of Consumer Information and Insurance Oversight for PPACA Insurance Reforms
Health Industry Washington Watch
April 19, 2010
HHS has published a notice announcing the creation of the "Office of Consumer Information and Insurance Oversight" within the HHS Office of the Secretary." The mission of the Office is to provide "leadership for implementing the provisions of the health reform bill that address private health insurance."
Insurance
Benefit for Uninsured May Still Pose Hurdle
The New York Times
April 20, 2010
Under the new health care act, some people with low incomes might face penalties if they don’t buy health insurance.
Insurers Act on Part of Health Law Early
USA Today
April 20, 2010
United Healthcare, Humana, Kaiser Permanente and WellPoint said they will put into effect some provisions of the new health care law ahead of schedule to let adult children stay on parents' plans until age 26.
Transparency/Safety
Cancer Fight: Unclear Tests for New Drug
The New York Times
April 20, 2010
So-called targeted therapies for cancer are only as good as tests to find their protein targets. And those tests can be surprisingly unreliable.
Hospital Rankings Show Reputation More Than Quality, Study Says
Business Week
April 20, 2010
Hospitals rated as top by U.S. News & World Report are chosen using a system that reflects their reputation with little connection to objective measures of quality of care, a study said.
Wellness/Chronic Care
FDA Plans to Limit Amount of Salt Allowed in Processed Foods for Health Reasons
The Washington Post
The Food and Drug Administration is planning an unprecedented effort to gradually reduce the salt consumed each day by Americans, saying that less sodium in everything from soup to nuts would prevent thousands of deaths from hypertension and heart disease.
The Wall Street Journal
April 20, 2010
There's mounting evidence and support among cardiologists that moderation in the battle against heart disease can often achieve results that are at least as good as aggressive tactics. Features Mayo Clinic cardiologist Dr. Stephen Kopecky.
Are School Lunches a National Security Threat?
AP/Google News
April 20, 2010
The obesity epidemic is threatening national security, so schools — which are on the front lines in battling the problem — need to boot out junk food and serve healthier snacks and meals, a group of retired military leaders is announcing today.
State news
FL: McCollum Losing Support Over Health Care Lawsuit Plans
The Miami Herald
April 20, 2010
Republican Florida Attorney General Bill McCollum has been the front runner in the race to replace Gov. Charlie Crist since August but, according to the poll of likely voters conducted April 8-13, he's not getting much traction among independents with his plan to sue the federal government over its healthcare reform package.
FL: SEC Wants Answers on Jackson Health System Loss
The Miami Herald
April 20, 2010
The U.S. Securities and Exchange Commission has launched a formal investigation into the finances of Miami-based Jackson Health System, focusing on a multimillion dollar bond sale last year.
FL: House Passes Medicaid Overhaul
HealthNews Florida
April 20, 2010
Calling the current system 'broken' and warning of long-term financial problems, the state House today approved a proposal that would gradually shift almost all Medicaid recipients into managed-care plans.
Minnesota Non-Profit Health Plans Strengthen After Four Tough Years
Minneapolis Star Tribune
April 20, 2010
The state's eight non-profit health plans that cover most Minnesotans turned a profit last year.
Medicare/Medicaid
CMS: Proposed Rule Would Decrease Hospital Payments by 0.1%
AHA News Now
April 20, 2010
The Centers for Medicare & Medicaid Services late today issued a hospital inpatient and long-term care prospective payment system proposed rule for fiscal year 2011 that would decrease average inpatient payments by 0.1%.
Implementing the Legislation
IRS Promoting Tax Credits in New Health Care Law
AP/Yahoo News
April 20, 2010
The government is reaching out to more than 4 million small businesses and tax-exempt groups to make sure they know about a new tax credit offered as part of the nation's health care law.
Prescription drugs
Price Controls Expected to Slow Drug Sales in 2010
AP/The Washington Post
April 20, 2010
Pharmaceutical sales growth worldwide will slow this year due to expiring patents for blockbuster drugs and tighter price controls imposed by European governments.
Drug Prices Rose 9.1% Last Year, Ahead of Federal Health Overhaul (full text below)
The Wall Street Journal
April 20, 2010
Drug companies sharply raised prices last year, ahead of increased rebates they must pay to Medicaid and other expenses tied to the federal health overhaul passed last month.
Employers
Healthcare Perks May Be Harder to Come By
The Los Angeles Times
April 20, 2010
Hundreds of thousands of Americans who get their health insurance through their employers have gotten used to company perks such as reduced-cost gym memberships or getting cash back for filling out health-assessment profiles. But a new survey reports that a small but growing group of firms will be imposing tougher requirements to get the incentives,
Health Information Technology
More Doctors Are Prescribing Medicines Online
The Wall Street Journal
April 20, 2010
Doctors are increasingly prescribing medications electronically, abandoning the traditional paper scripts that can result in drug errors due to hard-to-read writing or coverage denials by a patient's insurer.
Miscellaneous
Australian PM Wins Health Deal Aimed at Re-Election
Reuters
April 20, 2010
Prime Minister Kevin Rudd said on Tuesday he had reached agreement with all but one of Australia's states on major health reforms which he hopes will spearhead his 2010 re-election campaign.
*****
Drug Prices Rose 9.1% Last Year, Ahead of Federal Health Overhaul
The Wall Street Journal
April 20, 2010
Drug companies sharply raised prices last year, ahead of increased rebates they must pay to Medicaid and other expenses tied to the federal health overhaul passed last month.
Prices for brand-name pharmaceuticals rose 9.1% last year, the biggest increase in at least a decade, according to pharmacy-benefit manager Express Scripts Inc., which included the recent number in its annual drug-trend report. The boost for specialty drugs, a category that is largely biotech products, was even sharper: 11.5%. In 2008, the price rise had been 7.4% for traditional pharmaceuticals, and 9.4% for specialty drugs.
Some individual drugs saw double-digit increases in the first quarter compared with a year earlier, including 12.1% on Zetia, a cholesterol drug from Merck & Co., and 13.6% for Cymbalta, an antidepressant from Eli Lilly & Co., according to data from Credit Suisse. The firm, which tracks the pricing of brand-name drugs made by the biggest U.S. manufacturers, found wholesale prices went up 7.8% in the first quarter, compared with a year earlier.
The increases were "exacerbated by the health-care reform debate," said Steve Miller, senior vice president and chief medical officer of Express Scripts, although drug makers disputed that notion.
An Eli Lilly spokesman said its pricing policies last year weren't affected by the health bill, and such decisions take into account benefits for patients as well as "marketplace conditions and recovery of our R&D costs."
But Lilly did caution shareholders Monday that rebates to Medicaid, as well as other provisions in the law, would lower its 2010 revenue by $350 million to $400 million, and 2011 revenue by $600 million to $700 million.
A Merck spokesman said its "price adjustments are independent of health-care reform," and are instead driven by an approach that aims to "ensure patient access and enable Merck to invest in research and development."
Zetia's pricing for most of last year was controlled by an independent joint venture involving Merck and Schering-Plough Corp., which are now merged, the company added. Both Merck and Lilly said the pricing numbers didn't reflect the effects of rebates and discounts granted to many health-care payers.
The health law will also require the drug industry to knock off half the price paid by Medicare beneficiaries in their "doughnut hole" coverage gap starting in 2011, among other expenses, though the pharmaceutical companies will also benefit from an influx of newly insured consumers that will kick in later.
The effects of the price increases on overall drug spending are being tempered by the availability and aggressive promotion of cheaper generic alternatives, among other factors. In its report, which reflects the drug benefits it administers for corporate clients, Express Scripts also said drug spending went up only 6.4% in 2009, slightly more than last year but lower than five years earlier.
Indeed, a report this month from IMS Health said that the number of prescriptions dispensed for generic drugs rose 5.9% last year, but those for branded drugs fell 7.6%.
Overall spending on prescription drugs rose just 5.1% according to IMS, which looks at different data than Express Scripts.
Another reason for price increases is probably that insurers, employers and pharmacy-benefit managers have become "much more difficult gatekeepers," said Credit Suisse analyst Catherine Arnold. Discounts and rebates used to promote branded drugs precipitate price increases to offset those marketing costs.
Also, as drugs go generic, companies mark up the prices of the brand-name versions, assuming that patients who stick with those "are the people for whom price doesn't matter," said Mark McClellan, who formerly oversaw the Medicare and Medicaid programs for the Bush administration and is now at the Brookings Institution.
Express Scripts, which is based in St. Louis and has 36 million people in its commercial client group, said the actual drug-spending increase—as opposed to the price markup—was 4.8% for traditional pharmaceuticals, to $800.23 per member per year, and 19.5% in specialty drugs, to $111.10 per member per year. Big increases in spending occurred in several areas, including diabetes, driven by the growing number of people diagnosed with the disease, and antiviral drugs, due to flu concerns.
The pharmacy-benefit manager said its clients were able to help keep the increase in check through use of generics and other moves. But it argued that, across the entire U.S. market, there could be significantly greater health-care savings tied to how drugs are taken. The company estimated the savings at $163 billion a year, which could be achieved with greater use of generics and better adherence by patients prescribed drugs, both tactics that Express Scripts pitches to clients as among services it can provide.
Though Express Scripts members' average annual co-payments rose, they didn't go up as fast as drug spending, because employees paid a slightly smaller share of the cost of drugs last year compared with 2008. The total for 2009 was 20.5% of the cost, or $186.48, compared with 21.2%, or $181.17, in 2008. The Pharmaceutical Research and Manufacturers of America, a trade group for the industry, said "prescription medicines represent a small and decreasing share of growth in overall health care costs" in the U.S. and are "yielding major health advances."
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