For years, pharmaceutical companies have been required to grant federal discounts only for drugs dispensed on base, or through Tricare’s mail order option or through Department of Veterans Affairs’ pharmacies. Defense officials tried administratively to get the same discounts for the retail pharmacy network but that effort was blocked in 2006 through a successful industry lawsuit. A short time later, when Tricare officials sought a legislation solution, White House politicos quietly sided with the Pharmaceutical Research and Manufacturers Association in opposing imposition of discounts on prescriptions through retail outlets. Meanwhile, the administration has pressed Congress over the last three years to raise beneficiary co-payments at retail pharmacies to entice greater use of mail order and base pharmacies where federal prices do apply. In passing the 2008 defense bill, the Democratically-led Congress left beneficiary co-payments unchanged, and directed that federal price discounts be expanded to brand name drugs filled in the Tricare retail network. The projected pharmacy savings for fiscal 2009, which total $719 million, exceeds the savings estimate used by Bush administration to argue for higher drug co-payments in the retail network. Only time will tell whether expansion of manufacturer discounts relieves budgetary pressure for raising retail pharmacy co-pays for beneficiaries.

Under the new law, drug companies that refused to extend discounts to Tricare retail outlets risk seeing their drugs removed from the DoD uniform formulary. Drugs left off the formulary for “not honoring federal ceiling price,” said Rear Adm. Thomas McGinnis, chief of Tricare pharmaceutical operations, won’t be dispensed without preauthorization which means a phone call to confirm the specific drug is medically necessary. Then the co-payment will be $22 per prescription rather than $9. “No firm is going to want that for their product,” McGinnis said. A “plain reading” of the new law shows Congress wanted the discounts to be effective at retail outlets 28 JAN 08, the day President Bush signed the bill, McGinnis said. But drug makers have filed a lawsuit in U.S. District Court challenging that contention, and arguing that the discounts don’t apply until DoD publishes a final rule for implementing the law. A proposed rule was published in the Federal Register 25 JUL. Industry comments are due back by 23 SEP. If the court finds that a final rule must be in place before lower prices apply to retail outlets, drug makers will avoid as much as $700 million in refunds to DoD for retail drugs dispensed since 28 JAN. “Because there’s so much money involved here,” McGinnis predicted, “we will see some creative arguments from the industry.”

DoD drug spending more than tripled from fiscal 2000 through 2006, rising to $6.2 billion from $1.6 billion. Most of the increase was in the convenient retail network where annual costs jumped nine-fold, from $455 million to $3.9 billion. McGinnis estimates that the cost of drugs dispensed through retail outlets will reach close to $4.5 billion in the current fiscal year. One reason DoD eased up on its push for federal price discounts in the retail network was the level of savings being realized through voluntary agreements with drug manufacturers for base pharmacies and the mail order program. In establishing a DoD uniform formulary, or approved list of drugs, DoD began studying whole classes of drugs to determine what medicines are both clinically effective and cost effective. Through last October, 322 drugs had been reviewed and 249 were kept on the formulary The rest were bumped, many of them for being too costly with no evidence that they were more effective. McGinnis said during this review process the cost of some drugs fell sharply because manufacturers wanted to ensure that their drugs were on the formulary.

“The industry has been bidding prices below the federal ceiling price, both at the military treatment facility and at the mail order pharmacy,” McGinnis explained. “It will take a while until we see whether they bid some of these retail pharmacy prices below federal ceiling prices.” If that occurs, he said, forcibly extending federal discounts to Tricare retail outlets could lead to savings greater than the current 25%. For now, McGinnis said he will continue to urge beneficiaries to save themselves and the government money by using base pharmacies and mail order to fill their prescriptions. With mail order, beneficiaries get a three-month supply for the same co-pay as a one-month supply through retail. Drugs dispensed on base or through mail order also will continue to cost DoD less. Federal pricing in retail outlets, McGinnis said, merely has narrowed the savings disparity. Using mail order or base pharmacies had saved the government 49% on each prescription. Now it will save about 24%, he said. [Source: Stars and Stripes Tom Philpott article 30Aug 08 ++]

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The objective is to conduct policy studies and analyses of data and to develop pilot projects to potentiate and enhance access” to existing telehealth and telemedicine services.” The centers are also meant to be “repositories of information and facilitators of information exchange within the Veterans Health Administration nationwide, as well with other government agencies such as the Department of Health and Human Services and the Indian Health Service, and with nongovernmental entities,” she added. The VA is planning to capture and disseminate insights from center studies through a Web site. “In that way, we will have real-time communication of information across the three centers and across the system at large,” Vandenberg said. “The compilation of information and insights and their rapid dissemination will enhance the quality of service we provide to veterans in rural areas.” Vandenberg did not rule out the possibility of investing in other information technologies to capture and analyze data from the centers but added, “It will take at least nine months to gain the intelligence” needed to inform those decisions. Vandenberg expects the centers to spotlight, not only what diverse rural communities have in common, but also how they are distinct, as far as delivering health care services to veterans. [Source: Government Health IT Peter Buxbaum article 29 Aug 08 ++]

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Lott at the hospital association, which represents UCLA and about 170 other medical facilities, said patients are wrong to think that the charge on their bill reflects the actual cost of treatment. Rather, he said, hospitals use a “cost-plus” system by which charges include both the cost of a service and a portion of general overhead, including treatment of uninsured people who can’t afford the provider’s cost-plus prices. At the same time, insurance companies, along with state and federal authorities representing Medi-Cal and Medicare members, negotiate lower rates in return for delivering thousands of patients to a particular clinic or hospital. The upshot is that providers are overcharging insured patients because they have no other way of meeting total expenses, while insurers are paying significantly less than the billed amount because they know they’re being hit up for unrelated costs. Insurers’ underpayments, in turn, only force providers to increase bills even more. It’s a system that both condones and perpetuates inflation while all but eliminating transparency in the marketplace. It also spells doom for the 45 million Americans lacking health coverage, who have no choice but to pay the full amount of a hospital’s cost-plus charges and thus can be wiped out financially by a major medical problem.

“Healthcare is the one sector where market mechanisms work least,” said Peter Lindert, an economics professor at UC Davis who specializes in public-health issues. “Prices are whatever you can get away with.” As my colleague Jordan Rau reported last week, California state lawmakers managed to pass some bills in the latest session that address healthcare problems but came up well short of their goal of reforming the system to make it friendlier — and more accessible — to patients. Among legislation torpedoed by lobbyists for doctors and hospitals was a bill that would have given the state new powers to collect information on prices charged by healthcare providers. Support for the bill dwindled after lobbyists managed to exempt doctors from the reporting requirement and inserted language recognizing the “tremendous burden” that revealing actual costs would be for providers. Score that a win for the status quo and a setback for anyone who thinks healthcare costs are out of control. “We are rapidly approaching a time where important policy discussions are going to have to be had on this issue,” said Santiago Munoz, associate vice president of clinical services development in the UC president’s office. What’s needed is a massive infusion of political courage to tackle genuine healthcare reform. [Source: Los Angeles Times Consumer Confidential David Lazarus article 7 Sep 08 ++]

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• All children between ages 6 months and 18 years, unless they have a serious egg allergy. Until now, flu vaccine was recommended for children under 5 or those with chronic illnesses such as asthma. The expanded recommendation takes into account that healthy school-age children have higher rates of flu than other age groups.

• Adults 50 and older.

• People of any age with certain lung, heart or other chronic disorders, or a weakened immune system.

• Women of any age who will be pregnant during flu season.

• Residents of nursing homes and other chronic-care facilities.

• Health care workers.

• Parents or other caregivers of people with high-risk conditions.

Choices include standard flu shots for all ages, and the nasal vaccine FluMist, which can be used in health people ages 2 to 49. The CDC says there should be plenty of flu vaccine available despite the extra influx of children. While 140 million doses were manufactured last year, fewer than 113 million were actually distributed. Many pediatricians already had ordered vaccine by the time CDC added school-age children to the list. While acknowledging that they may not be ready to fully vaccinate this group until next year, CDC is urging them to try and encouraging more programs that provide flu vaccine in schools, with parents’ permission. Hawaii has announced a “Stop Flu at School” program to offer free flu vaccination at elementary and middle schools statewide. [Source: Washington Post AP article 8 Sep 08 ++]

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With the praise, the panel also recommended a mixture of more research, greater cooperation among federal agencies, and more education for health care workers and community leaders to further strengthen and share VA’s ability to help veterans and their families. Called the “Blue Ribbon Work Group on Suicide Prevention,” the five-member group was composed of suicide prevention experts from VA, the Department of Defense, the Centers for Disease Control and Prevention, the National Institute of Health, and the Substance Abuse and Mental Health Services Administration. The group was created by Peake and met 11-13 JUN 08. Among the panel’s recommendations to further enhance VA’s outstanding

programs, many of which VA has already begun to implement, are:

* Design a study that will identify suicide risk among veterans of different conflicts, ages, genders, military branches and other factors. VA has committed to work with other federal agencies to design such a study within 30 days.

* Improve VA’s screening for suicide among veterans with depression or post-traumatic stress disorder (PTSD). VA is in the process of designing a new screening protocol, with pilot test undertaken during the fiscal year quarter beginning Oct. 1, 2008.

* Ensure that evidence-based research is used to determine the appropriateness of medications for depression, PTSD and suicidal behavior. VA’s is providing written warnings to patients about side

effects, and the Department’s suicide prevention coordinators are contacting health care providers to advise them of the latest evidence-based research on medications.

* Devise a policy for protecting the confidential records of VA patients who may also be treated by the military’s health care system. VA is already developing a plan to clarify the privacy rights of patients who come to VA while serving in the military.

* Increase research about suicide prevention. VA has announced several funding opportunities this year for research on suicide prevention and is developing priorities for suicide prevention research.

* Develop educational materials about suicide prevention for families and community groups. VA is examining the effectiveness of support groups and educational material for the families of suicidal

veterans, and producing a brochure for the families of veterans with traumatic brain injury about suicide, which will be available within 30days.

* Increase training for VA chaplains about the warning signs of suicide. VA offices responsible for chaplains and mental health professionals are studying ways to implement this recommendation, with a

report due by 1 NOV.

* Develop a gun-safety program for veterans with children in the home, both as a child-safety measure and a suicide prevention effort. A VA directive establishing the program is being developed, with full implementation expected during the fiscal year beginning Oct. 1, 2008.

[Source: VA Media Relations Sep 08 ++]

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Aroostook County ME. Scheduled to begin operation this October are facilities in Houston County GA, Juneau County AK, and Wasco County OR. Clinics to be operational by AUG 09 are in Winnemucca NV, Yreka CA, Utuado Puerto Rico, Lagrange TX, Montezuma Creek UT; and Manistique MI. The Department’s recent outreach to veterans in rural areas includes:

• The Creation of a 13-member Veterans Rural Health Advisory Committee to advise Peake on issues affecting veterans in rural areas (www.va.gov/opa/pressrel/pressrelease.cfm?id=1511);

• Announcement of the roll-out in early 2009 of four new mobile health clinics to serve veterans in 24 predominately rural counties (www.va.gov/opa/pressrel/pressrelease.cfm?id=1552);

• Announcement of three new Veterans Rural Health Resource Centers — in White River Junction, VT; Iowa City IA; and Salt Lake City — to develop practices and products that will improve health care for veterans in rural areas (www.va.gov/opa/pressrel/pressrelease.cfm?id=1548);

• Nearly tripling the mileage reimbursement — from 11 cents per mile to 28.5 cents per mile — paid to veterans who travel significant distances to receive VA health care (www.va.gov/opa/pressrel/pressrelease.cfm?id=1447

<http://www1.va.gov/opa/pressrel/pressrelease.cfm?id=1447> ); and

• Creation of a “Travel Nurse Corps” to augment existing nursing staff in needed areas <http://www1.va.gov/opa/pressrel/pressrelease.cfm?id=1466> ).

[Source: VA Media Relations 12 Sep 08 ++]

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• One is that Congress is downright pokey in approving annual budgets. Only once in the last 14 years, and twice in the last 20 years, has the VA budget been approved by the start of the new fiscal year. The funding bill, known as appropriations, has been 3½ months late, on average, over the last six years.

• A second and more serious problem is that the VA budget still isn’t large enough to eliminate waiting lists for medical appointments.

The veterans’ groups propose a two-part solution: They want a better method of calculating how much money is needed and they want advance appropriations. If their plan was in effect now, Congress would be working on the veterans’ budget for fiscal 2010, which begins on 1 OCT 09. Peter Dickinson, of Stand Up for Veterans, a program created by Disabled American Veterans, said calling for advance appropriations is an attempt to “break the logjam” that has stopped Congress from resolving a long-standing issue: VA budgets that don’t fully serve veterans. For years, major veterans’ groups have pushed Congress to treat VA funding similar to funding for Medicare and Medicaid. Costs for those programs are covered without Congress having to pass annual budgets. While key lawmakers have expressed support for so-called “mandatory” funding of veterans’ programs, Dickinson said a combination of problems has kept Congress from approving the idea, leaving veterans’ groups to look for other ideas.

Joseph Violante, DAV’s national legislative director, described advance funding for the VA as a way for veterans to get the first slice of funding in each budget without having to compete with other programs. Violante said he and other veterans’ representatives have met with congressional leaders and staff to try to win support for their proposal but have not received firm commitments. Veterans groups hope to get lawmakers on record supporting the idea before the November elections to set the stage for consideration of the funding initiative early next year, when the next session of Congress convenes. Dickinson said the VA health care system suffers disruption every year the budget is late because VA generally is limited to spending at the previous year’s limits until a final appropriations bill is approved for the new year. Under such restrictions, VA cannot do long-ranging planning or purchase major medical equipment, and the hiring of personnel can be delayed, Dickinson said. It is not yet clear whether Congress will pass the upcoming fiscal 2009 veterans budget by the 1 OCT start of the fiscal year. [Source: NavyTimes Rick Maze article 15 Aug 08 ++]

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• The Specially Adapted Housing grant (SAH), currently limited to $50,000, is generally used to create a wheelchair-accessible home.

• The Special Housing Adaptations (SHA) grant, currently limited to $10,000, is generally used to assist veterans with mobility throughout their homes due to blindness in both eyes, or the anatomical loss or loss of use of both hands or extremities below the elbow.

• A third type of grant established by the new law, the Temporary Residence Adaptation (TRA) grant, is available to eligible veterans and seriously injured active duty servicemembers who are temporarily living or intend to temporarily live in a home owned by a family member.

While the SAH and SHA grants require ownership and title to a house, in creating TRA, Congress recognized the need to allow veterans and active duty members who may not yet own homes to have access to the adaptive housing grant program. Under TRA, veterans and servicemembers eligible under the SAH program would be permitted to use up to $14,000, and those eligible under the SHA program would be allowed to use up to $2,000 of the maximum grant amounts. Each grant would count as one of the three grants allowed under the new program. [Source: U.S. Medicine article 14 Aug 08 ++]

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Death rates from heart attack, heart failure and pneumonia are widely viewed as yardsticks of a hospital’s overall performance. Last year, the U.S. Centers for Medicare and Medicaid Services (CMS) released a broad comparison of death rates for heart attacks and heart failure, noting how hospitals compared with the national average — better, worse or no different — without releasing the death rates themselves. This year the agency decided to disclose them to consumers. The agency posted its new mortality estimates on a government website www.hospitalcompare.hhs.gov , along with more than two dozen other measures of how well hospitals meet patients’ needs. Among them are statistics on what percentage of a hospital’s patients get appropriate care for a variety of ailments, including childhood asthma, and 10 measures of patient satisfaction with the hospital experience. All three types of measurements give hospitals ways to assess — and improve — their quality of care, but many health officials regard the number of patients who die in the hospital or soon after discharge as the ultimate measure of performance.

Knowing a hospital’s death rates gives consumers more power to influence the quality of their medical care, says Lisa Iezzoni, associate director of the Massachusetts General Hospital Institute for Health Policy. “What the mortality rate does is give you an entree to talk to your doctor and say, ‘Look, is this hospital stay going to kill me?’ ” That’s not an easy question to answer with any certainty. By trying, officials knew they were courting trouble with the hospital industry, Iezzoni says. An earlier effort by Medicare to report on hospital death rates faltered in the early ’90s. The agency wilted under relentless criticism that its so-called death list didn’t give adequate weight to a hospital’s mix of patients, including how sick, poor and old they were. This time, the architects of the new analysis took a different approach. They tallied death rates for common life-threatening conditions, not the hospitals’ overall mortality rates. And they chose a strict statistical formula that allows them to say with 95% confidence that a hospital’s death rates fall within a certain range. But there’s a rub, experts say. Using this method of analysis, only a handful of hospitals stand out as better or worse than the national average. The new formula captures all deaths among 35 million Medicare beneficiaries that occurred within 30 days of the patients’ hospital admission. They also factored in the hospital’s patient mix and how many deaths might be expected in a hospital with that population. Including deaths that occurred within 30 days after admission made it tougher for a hospital to game the system by shipping risky cases somewhere else.

• To compare hospitals near you on heart attack, heart failure and pneumonia refer to www.usatoday.com/news/health/hospitals-graphic.htm

• To view hospitals with highest and lowest death rates www.usatoday.com/news/health/2008-08-20-hospitals-best-worst_N.htm

• To compare hospitals in your ZIP code refer to www.hospitalcompare.hhs.gov/hospital/mortalitytool/index.asp

[Source: USA TODAY Steve Sternberg/ Anthony DeBarros article 20 Aug 08 ++]

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• First, accepting new “Priority 8” enrollees should be gradual to protect access to care for service-disabled veterans and all other current enrollees.

• Second, resumption of Group 8 enrollments, which were suspended in 2003, should not occur without reform of VA health care budgeting to ensure that VA health budgets, year after year, finally become “sufficient, timely and predictable,” said Joseph A. Violante, DAV’s legislative director.

Congress has refused to pass a law that would mandate full funding of VA health care based on number of enrollees. But Violante said DAV has joined with eight other veterans’ service organizations to back an alternative to mandatory funding that lawmakers are more likely to embrace. With the House having voted this month for a 10% rise in Priority 8 enrollments starting 1 OCT, and with Democratic senators also supporting for such a move, DAV and its partners believe VA budgeting reform has a new urgency to protect enrolled veterans’ access to care. The Veterans’ Health Care Budget Reform Act, to be introduced after lawmakers return from recess in September, has two parts.

• One would put VA health care under an “advance appropriation” schedule. If it were in effect already, Congress this year would be passing a VA health budget that would take effect in fiscal 2010, a year ahead of the current schedule. The goal, said Violante, is to end a crippling pattern by lawmakers of failing to pass VA health budgets before the fiscal year begins 1 OCT. These budget delays, which last two to three months, force VA medical facilities to operate under “continuing resolutions” which freeze spending at previous year levels until a new appropriations bill finally is passed and signed.

• Part two of the reform package would seek to keep funding levels for VA health care sufficient. Until very recently, VA health budgets were sharply under funded, Violante said. Yet Congress declines to support a mandatory full funding law, arguing that it limits congressional prerogatives. It also is an expansion of VA entitlements which triggers a “pay-go” budget rule. That rule requires that any new entitlement spending either be offset by an entitlement reduction or paid for with tax increases.

What DAV and fellow organizations in the Partnership for Veterans Health Care Budget Reform now propose is that VA be directed to use a new actuarial model it has developed which very accurately can project the per capita cost of providing health care to its enrolled patient population. The Partnership’s proposal would require the Government Accountability Office to verify annually the accuracy of these VA health cost projections so everyone knows the cost of continuing to provide current services to enrolled beneficiaries. If the administration then were to seek a budget that fell short of covering those projected costs, the White House would have to explain why both to Congress and to veterans, and the political heat could be severe. VA now won’t share what its actuarial model shows about proper funding of VA health care, said Peter Dickinson, a consultant to DAV and former professional staff member on the House Veterans Affairs Committee. “It’s sort of behind the curtain, inside the black box. Instead they put forward a number that may or may not be based on that but also reflects other [spending] priorities of the administration. Requiring an annual audit to force VA to reveal what health care spending must be to support full services to all VA patients would make it politically difficult to short these budgets in the future. If we can get a budget process that’s a year in advance and based on numbers we can look at, the cost of re-opening enrollment to Group 8’s veterans would be known and presumably fully funded. ” Dickinson said. If health budgeting isn’t reformed, and enrollment doors swing open, “we could be in danger of returning to the days of ‘03 and ’04 when more than 300,000 veterans waited six months or longer to get an appointment.” [Source: Stars & Stripes Tom Philpot article 23 Aug 08 ++]

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