Wyden addresses Sovaldi | A court case you didn’t see | A strategic plan for behavioral health

July is the high point of summer in Oregon.  So, while we don’t want you to leave the campsite or the river, we want you to know we’re staying on top of the healthcare marketplace while you’re out.  What we’re watching can wait till you get back – but it’s all building into potential future conflict.

These issues will likely be talked about in Salem for 2015. We think that agenda is taking shape in this month’s 5 Things We’re Watching.

DJ 5 things updated

1. How are CCOs actually doing?

This was one of the most common questions asked by our Convening Panel recently.  So, we’re exploring speakers who can offer objective, data driven insight into how the transformation project is going. We covered how performance incentives were distributed. Likewise, this weekend’s 3-part review of CCOs by the Bend Bulletin did a great job of asking a similar set of questions. You’ll see more when our Topical Agenda is released next week.

Sure, the OHA is collecting great data on how care delivery is being transformed under the CCO model, which alone we think is outstanding.  But it doesn’t fully tie financial performance to those activities, which hospitals and plans provide to the state in the aggregate.  With some big tax votes ahead in the 2015 Legislature, we’re hearing folks say they want more.

2. Building a strategic plan for behavioral health won’t be easy

It’s been interesting to read through the minutes from the OHA’s stakeholder meetings to gather input for a behavioral health strategic plan.  Like other state’s where we we’ve observed similar processes, each community has a somewhat unique set of concerns.  While Bend seemed to focus on access issues (including “wages for staff are inadequate”), Pendleton appeared to speak more to the systemic barriers which prohibited good care delivery (“System is not outcomes based”).

If you’ve seen one community provide health care, you’ve only seen one community.  Lessons in one place seldom apply perfectly elsewhere.  OHA Director Suzanne Hoffman has a huge task ahead to pull these different views together into a comprehensive plan (which is expected to be released in draft form for feedback as soon as August).

3. Sovaldi political backlash building

Yesterday, Gillead announced $3.5 billion in sales of Sovaldi in the 2nd quarter alone, making it the highest grossing drug ever in a mere seven months since approval.  With 3 million Americans infected with Hep C, that “can torpedo the whole health insurance system.”   With Medicare budgets getting impacted, Sen. Wyden is starting to push Gillead to show details on its pricing methodology.

We’re hearing rumors – both in OR and DC – of PhRMA gearing up for a fight at the state legislative level, including Oregon.  The idea would be to show Oregon, as a progressive state, as a defender of patient rights (to access the drugs) and fiscal responsibility (that drugs save money otherwise spent on care).  If the argument carries in Oregon, proponents can say “See, even progressive Oregon understands this.”  Opposition groups look like they are forming a national coalition, but it’s unclear how that’s developing.


4. California court case giving leverage to plans over providers

A California appellate court found that the “reasonable value” of health care services was not something hospitals could determine on their own.  Rather, “value” is determined by what the market will pay.  Put another way, “All rates that are the result of contract or negotiation, including rates paid by government payors, are relevant to the determination of reasonable value.”  Children’s Hospital Central California thinks this may shift the leverage in negotiations away from providers to plans in a pretty significant way.

This brings to mind the recent hullabaloo between FamilyCare and OHSU, and other plan-provider lawsuits in the region, and makes us wonder whether this line of thinking will infuse future legal proceedings in future plan-provider tussles.

Providence Health & Services

5. Courts shine light on Cover Oregon’s federal partnership

This week’s DC Circuit Court decision on Halbig v Burwell, which invalidated premium subsidies on federal exchanges, raised the stakes in Oregon’s (temporary?) transition to the federal exchange.

While many anticipate the Supreme Court taking up this legal question (particularly after the 4th Circuit had an exactly opposite legal determination) in its next term, no one knows how the Court will rule.  Recall how Chief Justice John Roberts changed his mind on the ACA decision between the time the majority voted and when the decision went to print.

Bottom line:  Cover Oregon should continue to plan on reverting to a full state-based exchange for 2016 rather than assume “this ruling does not affect” the almost 100,000 exchange enrollees.