IBM, one of largest employers in the nation, has decided to waive the $20 co-payments it had charged company-insured employees for visits to their primary care physicians.

Big Blue believes the move can cut its health costs by encouraging people to see their PCPs more frequently which should result in earlier diagnoses and reductions in the number of visits to specialists and ERs.

Randy MacDonald, IBM’s Sr. VP for Human Resources, said the move “is designed to encourage people to get fixed early…we’d rather diagnose a situation and deal with it quickly as opposed to it becoming chronic.”

IBM’s newfound emphasis on primary care is, according to MacDonald, part of its “wellness” strategy which reduces health care costs by preventing illness, or at least treating it earlier. IBM spent $79 million on these programs between 2004 and 2007 and estimates this approach saved the company $191 million.

IBM’s wellness programs pay employees up to $300 per year to take exercise classes or enroll their children in weight-monitoring programs. Soon, it will add a stress relief program to the mix.

“In these economic times, with the loss of home equity and the loss of savings, we are seeing stress-related issues” in employees, MacDonald told the Wall Street Journal.

Helen Darling, president of National Business Group on Health, called IBM’s move “very unusual. The number of employers who cover primary-physician visits without a co-pay is minuscule,” she said.

IBM has 115,000 US employees and spends nearly $1.3 billion per year on their health care. Its benefit practices are watched closely by other employers, and it is known to be a trend-setter in this area.

Fourteen years ago, Harvard researchers revealed that insurance companies were big-time investors in tobacco companies. The seemingly hypocritical position prompted outrage and calls for them to divest.

But when the same scientists recently re-examined the matter, they found the industry had failed to kick the habit.

By reviewing SEC filings and news reports from 2008, J. Wesley Boyd and colleagues determined that US, UK and Canadian-based insurance companies owned at least $4.4 billion worth of stock in companies whose subsidiaries produce cigarettes, cigars, chewing tobacco and related products.

“Despite calls upon the insurance industry to get out of the tobacco business by physicians and others, insurers continue to put their profits above people’s health,” Boyd told Medical News Today. “It’s clear their top priority is making money, not safeguarding people’s well-being.”

The World Health Organization estimates that tobacco products contribute to 5.4 million deaths per year worldwide.

New Jersey-based Prudential Financial Inc., which markets life and disability insurance, has holdings in tobacco firms like Reynolds American and Philip Morris, that total $264 million.
 
These numbers are dwarfed by Toronto-based Sun Life which sells health, disability, life and long-term care insurance. It owns just north of $1 billion in tobacco company stock.

Meanwhile, London-based Prudential Plc, which offers disability, health and long-term care insurance, holds $1.38 billion in British American Tobacco and other such companies.

“Insurance firms have figured out ways to profit from both… investing in tobacco (and) selling life or health insurance. (They) exclude smokers from coverage or, more commonly, charge them higher premiums. Insurers profit -- and smokers lose -- twice over,” wrote the authors.

Boyd’s group first reported on the matter in a 1995 Lancet article.

The Centers for Medicare and Medicaid Services announced last Wednesday that it was changing its payment rates to providers in 2010.

The new rates will increase payouts to beleaguered primary care practitioners while snubbing radiologists and cardiologists, among others.

Among the perks for PCPs, CMS has proposed a bump in payments for the Initial Preventive Physical Exam, a.k.a. the “Welcome to Medicare” visit to reflect the true complexity of the service.

CMS also proposed to change the way Medicare recognizes professional liability expenses such that Medicare’s support for these costs is redirected to providers experiencing the highest malpractice premiums.

Beyond that, the news was gloomier than Boston’s weather this June. 

CMS is, for example, proposing to remove physician-administered drugs from the definition of “physician services” and to stop paying for consultation codes, which are typically billed by specialists at a rate higher than procedurally similar evaluation and management (E/M) services. 

Overall, the changes would increase payments to GPs, family physicians, internists, and geriatric specialists by 6-8%, according to a CMS press release. The biggest losers will be radiologists, especially interventional radiologists who should see cuts of at least 20% for most imaging tests.

Payments to cardiologists would be cut about 11% overall, with cuts of up to 42% for reading an echocardiogram and 24% for performing cardiac catheterization.

Cuts “like this threaten the successes we have had over the years with reducing heart disease,” ACC president Alfred Bove warned the Wall Street Journal.

Meanwhile Ted Epperly, president of the American Academy of Family Physicians, said the CMS proposal would drive more medical students into primary care, and hailed the pay raise for his constituency as “long overdue.”

Continuing its remarkable transformation into a force for positive change in America’s Rube Goldberg health care system, Wal-Mart announced last week that it supports legislation requiring employers to provide health insurance for their workers.

The so-called employer mandate has been a centerpiece of the Big O’s plans to provide health insurance for nearly all Americans.

“We are for an employer mandate which is fair and broad in its coverage,” said Wal-Mart Chief Exec Mike Duke in a letter to the Coronated One.

Wal-Mart’s current stance represents a hard-to-believe metamorphosis from just a few years ago, when its reputation was sullied and its stock price pummeled by repeated run-ins with organized labor.

The letter was co-signed by Andrew Stern, president of the Service Employees International Union, and John Podesta, who ran the Obama transition team and is now chief executive of the lefty think tank, Center for American Progress.

Wal-Mart has, in fact, already put its money where its mouth is. Only 5.5% of its employees lack health insurance. That compares favorably with the national rate of uninsured employees, which stands at 18%.

Support from the retail giant flies in the face of most other companies that have spoken publicly about the matter. Even the Chamber of Commerce opposes the mandate, claiming it would lead to lay-offs, wage cuts and a wave of bankruptcies.

And Neil Trautwein, a VP for the National Retail Federation said he was “flabbergasted” by Wal-Mart’s insolence. The mandate is “the single most destructive thing you could do to the health-care system shy of a single-payer system.”

This post first appeared on the Practice Fusion Blog.

During Tuesday’s press frolic, the Big O put some mustard on his pitch for a public option, dismissing as “not logical” suggestions that a government plan would sink Big Insurance faster than the Titanic.

He followed quickly with a favorite refrain, which is that good, old-fashioned competition from a public plan would be an “important tool to discipline insurance companies.”

Then, in a denouement worthy of at least runner up at a Harvard Law Debate Club, he triple-dog-dared anyone to come up with a better plan that met his 2 etched-in-stone requirements. “Reform has to control costs and it has to provide relief to people who don’t have health insurance or are underinsured,” he said.

Big Insurance, destined in this match to play Smokin’ Joe to the Big O’s Ali, released a wild haymaker of its own 2 hours before the Big O even showed up.

“We do not believe it is possible to create a government plan that could operate on a level playing field,” quoth Karen Ignagni, president of America’s Health Insurance Plans, and Scott Serota, president of the Blue Cross and Blue Shield Association in an open letter to the Senate.

“Regardless of how it is initially structured, a government plan would use its built-in advantages to take over the health insurance market,” the letter continued.

No doubt the Big O smirked when he read that.

Meanwhile, Kent Conrad, the intrepid Senator from North Dakota has created a stir with his suggestion that nonprofit consumer-owned cooperatives could be an alternative to the government plan.

He foresees the Feds forking over $3-4 billion to jumpstart the co-ops, after which time they would sink or swim on premiums and investment income, just like Big Insurance.

The Big O knows he can live with this or any approach that covers most everybody without breaking the bank, but on this day he was playing offense.

“If private insurers say that the marketplace provides the best quality health care, if they tell us that they’re offering a good deal, then why is it that the government — which they say can’t run anything — suddenly is going to drive them out of business?” Obama asked.

Mr. Spock himself couldn’t have asked a more logical question.

In 2006, Massachusetts enacted a law requiring that all residents obtain health insurance.

Ever since, developments there have been watched closely since what happens in the state might play out nationally should the Great American Health Care Do-Over include an individual mandate.

Unfortunately, the Bay State’s program has been plagued by unsustainable cost escalations since Day 1, and the situation has been exacerbated recently by recession-related budget shortfalls and rising unemployment.

It was a matter of time before cuts had to be made, and that happened yesterday when state policymakers announced they’re cutting $115 million, or 12% from the budget of Commonwealth Care, a centerpiece of the state’s initiative which subsidizes premiums for poor residents.

The cuts amount to a forced slowdown in Commonwealth Care enrollment. According to the Boston Globe, about 18,000 residents who qualify for subsidies but who have not designated a health plan will no longer be automatically enrolled in program.

Tentative cuts in dental coverage for 92,000 Commonwealth Care enrollees and health insurance for 28,000 legal immigrants have also been proposed, although these proposals  must be approved by governor Deval Patrick.

He has until Monday to decide.

Commonwealth Care currently has 177,000 members. It’s projected to have 212,000 by year end, 2010.

“No decision has been made’’ on the immigrant coverage issue, Leslie Kirwan, Patrick’s secretary of administration and finance told the Globe. “It’s certainly going to be at the top of the list’’ of items Patrick might restore to the budget, she added.

Leaders of Health Care for All, a Bay State consumer group, said the proposal would be tough on non-English-speaking residents who find it hard to navigate the complex enrollment process for Commonwealth Care.

“My concern is people will not get the care they need,’’ lamented the group’s representative, Lindsey Tucker to the Globe.

Everyone knew the US’ Rube Goldberg healthcare system was plagued by high costs for billing- and insurance- related activities, but few would have believed it was this bad.

A recently concluded 3-year study of the matter has revealed that administrative (non-physician) costs associated with these 2 activities add up to $51,221 per FTE physician per year.

That’s not including the astonishing $34,052 per year per FTE physician to account for the physician’s own time spent on billing and insurance.

Summing the 2 brings the annual spend on these activities to $85,273 per FTE physician, or 10% of the total operating revenue for an average practice.

Approximately 0.67 FTE non-clinical personnel per FTE physician is allocated to billing and insurance, according to the study.

To reach their conclusions, Julie Sakowski and colleagues at the Sutter Health Institute interviewed business office personnel, observed office work flows, conducted budget and expense reviews and implemented a survey to assess clinician time spent on billing and insurance.

The study was funded by the Commonwealth Fund and the Robert Wood Johnson Foundation.

In a separate study just released by the Medical Group Management Association, investigators found that physicians spend about 43 minutes per workday interacting with insurance plans.

MGMA estimated that system-wide, overall staff time spent on insurance matters alone equaled $21-$31 billion per year, or $68,000 per physician per year, a number that can be reconciled with results from the above-mentioned Commonwealth Fund study.

“Minimizing billing and insurance-related activities is not the only goal of (health system) reform, (but) standardizing health plan features and processing requirements presents a tremendous opportunity for improving efficiency in a multi-payer health care system,” Sakowski told HealthCareITnews.

The Senate Finance Committee has circulated a draft health reform proposal that features an individual mandate, authorizes an expansion of Medicaid, and–hold the presses!–dumps the Big O’s pet project, a government-sponsored plan that would compete with Big Insurance.

The draft also includes scaled-back coverage provisions that limit costs associated with the overhaul.

One such provision cuts the number of middle-class folks that would qualify for tax credits designed to render insurance more affordable.

The Big O, HHS Secretary Kathleen Sebelius, and many House Democrats including Nancy Pelosi favor a public option to keep Big Insurance honest. Senate Democrats have been divided on the issue since Day 1.

In lieu of a public option, the draft proposes consumer-owned cooperatives similar in design to rural telecom and electricity providers. They would be “subject to government oversight and funded with federal seed money,” according to the Washington Post.

Meanwhile, House Democrats are divining ways to pay for the overhaul. They’re considering a Robin Hood tax on the rich, increased payroll taxes on employees, sin taxes on sugary drinks and alcohol, and a new value-added tax.

The House is also considering the Senate’s preferred approach to paying for reform, which is to tax health benefits received by Americans through their employers, as well as the Big O’s idea to limit itemized deductions for the rich.

A particularly controversial issue, according to the Post, is the extent to which employers must subsidize public coverage for employees if they don’t offer coverage to employees themselves.

People worry that if lawmakers don’t get this right, employees will flee to federal plans and send government costs through the roof.

The draft includes preliminary proposals for handling this nightmare.

Two Democratic senators in the eye of Hurricane Health Reform are butting heads over the most explosive political issue in the process—whether or not to establish a public health insurance plan.

Massachusetts’ Edward Kennedy favors a Medicare-like government-sponsored plan that would compete with Big Insurance.

Montana’s Max Baucus, who has been holding hands with Republican Senator Charles Grassley for months in an attempt to craft legislation that is at least vaguely bipartisan, prefers to bag the public plan or at least play it down initially.

For his part, Grassley, who seems to have forgotten how to count to 60, told the New York Times, “we cannot afford the public health plan we have already,” a slap at Medicare.

The Big O believes a public plan would “keep the private sector honest,” but says he can live without it.

Most House Democrats, including the 3 committee chairmen who are drafting the House bill, are in Kennedy’s camp.

In the Baucus compromise, a public plan would be formed only if Big Insurance fails to provide affordable coverage to all Americans by some deadline, presumably during the lifetimes of our great-grandchildren.

Meanwhile, New York Senator Charles Schumer has floated yet another proposal, in which the public plan would have to comply with the same rules and standards that apply to Big Insurance, including a requirement that it sustain itself with premiums rather than a money-tree over at Treasury.

Opinion polls show that health consumers would like a public plan, but Big Insurers worry it would drive them out of business and lead to a government-run, single-payer system.

No one knows how the dispute will be settled, but the Big O has offered to host a winner-take-all game of H-O-R-S-E during halftime of an NBA Finals game.

Everyone in policyville slept well last night on news that key stakeholders agreed in principal to help the Big O tackle health care cost escalation.

Today it’s back to a thicket of problems that lie between us and reformland.

One particularly thorny issue is that government-sponsored health plan Obama had proposed during the campaign, the one supposedly designed for Americans who had problems acquiring private coverage.

The plan has been supported by House Speaker Nancy Pelosi, HHS Secretary Kathleen Sebelius and a cavalcade of devotees on the left.

In the afterglow of yesterday’s announcement, the pessimistic few remind us that just last week, every one of those devotees gasped collectively when administration officials implied The Man was open to compromise on the idea.

Was Obama going to cave before serious negotiations got underway? 

No, Obama spokesperson Linda Douglass insisted. The Big O simply stated a willingness to consider any proposal that meets his broad goals. “The administration is open to all ideas for achieving those goals,” she reiterated to the Washington Post.

That did little to placate more than 70 House Democrats who told party leaders they’d reject any bill that failed to include a government-sponsored policy, not to mention 2 unions, which abruptly withdrew from a prominent health reform coalition after it said it would not endorse a public plan.

“It’s way too early” to punt on what the SEIU believes should be a central component of reform, a disappointed Andy Stern told the Post. The union’s president pulled his support from Health Reform Dialogue while taking a swipe at the Big O.

“You don’t make compromises with your allies,” he said. The SEIU by the way, is one of the groups that signed yesterday’s letter to the Big O.

“I took that as a signal to Senator Grassley” a Republican who has vehemently opposed the idea, seethed Len Nichols, director of health policy at the New America Foundation.

(more…)

In Q4 2008, WellPoint lost 288,000 covered lives, half of which were caused by rising unemployment and lost employee benefits.

“Economic conditions will continue to deteriorate and unemployment will continue to increase,” CEO Angela Braly sighed to analysts at the time. “This will impact commercial membership in 2009.”

She got that right.

The nation’s largest private insurer, which covers nearly 35 million lives, reported last week that it lost nearly half a million more members in Q1 2009, nearly 65% of which were due to layoffs or employees simply opting out of employer coverage.

That jaw-dropper was topped the next day by UnitedHealth Group Inc., the second largest insurer. The Minnesota-based company reported a drop of 900,000 in the number of people enrolled in its commercial health plans.

The news prompted economists to estimate that the uninsured population has swelled by at least 4 million people since the 2007 estimate by the Census Bureau pegged the number at 45.7 million.

The Kaiser Family Foundation estimates for example that for each percentage-point increase in the unemployment rate, the population of uninsured Americans grows by 1.1 million.

The findings were confirmed by Tenet Healthcare, a hospital chain that recently reported a 2% drop, year-over-year, in the number of admissions of patients with private coverage.

“It’s probably not a surprise that with all these people losing jobs, a lot will lose their health insurance,” Paul Ginsburg, president of the Center for Studying Health System Change told the Wall Street Journal.

With apologies to GE, Disney and the 8 US citizens who remain optimistic about prospects for our health care system.

Welcome to the US Health Care Carousel of Progress!

Normal carousels just spin ’round and ’round and don’t get you anywhere, but ours is different.

The Health Care Carousel makes progress every year.

And progress isn’t simply moving forward, it’s working together and dreaming and assuring better health care for all.

Progress is the whiz-BANG of an MRI machine in use for the evaluation of a 22 year old with a headache. It’s the drug-induced smile on the face of a woman that became depressed after losing her home to foreclosure.

Progress is the rhythmic lub-dupp of a heart beating normally following a transplant for preventable cardiac disease. It’s the sound of an uninsured child wheezing in a crowded emergency room.

Why, you can hardly imagine all the amazing gadgets they’ve got in ERs nowadays!

Remember the sixties when folks got their exercise doing the Twist? Well, today we keep our cholesterol down with pills!

And our food safety system has never been better.

Our generation may be the first in 300 years to experience a decrease in life expectancy, but think how much worse it would be without $10,000 cancer drugs and blood thinners that prevent complications from hardware we’ve inserted into people’s bodies.

It’s never been easier to find a PCP, and would you believe it? They’re building our city’s 17th PET scanner right where that run-down urban health clinic used to be.

You should hear physicians rave about how those newfangled EMRs save them time.

And progress even has a smell! It’s the smell of money lining the pockets of a hundred-thousand physicians that have been bought off by Big Pharma.

With all these marvels, it’s hard to believe things could get better than they are right now. But as you join us for a spin around our Carousel of Progress, you’ll surely agree. Anything’s possible.

Ethics
In a referenced essay titled, Transparency in the Pharmaceutical Industry, Brain Blogger’s Jennifer Gibson describes how the impending passage of the Physician Payments Sunshine Act has motivated Big Pharma to disclose financial relationships with physicians. She warns there may be adverse consequences from this otherwise laudable development: some physicians will be discouraged from forging socially beneficial collaborations with the private sector.

Last week, the FDA’s Psychopharmacologic Drug Advisory Committee unanimously rejected AstraZeneca’s application to market its atypical anti-psychotic drug Seroquel for generalized anxiety disorder and major depression.

Merrill Goozner at GoozNews applauds the decision, but wonders whether the agency may have left itself open to charges of bias by seating a patient representative on the panel who had lost a son to cardiac arrest while taking the drug. 

Health Care Renewal contributor Roy Poses has reviewed an unseemly side show to the Madoff scandal. The antagonist is Ezra Merkin, a hedge fund director charged with fraud for misrepresenting his investment strategies.

Merkin and Madoff had served on the board of Yeshiva University, which lost $110 million to the Ponzi scheme. Their unholy alliance leads Poses to consider possible negative consequences of having too many financial types on the boards of academic institutions.

Insurance
In the latest chapter of her neverending odyssey to navigate Big Insurance and the health care system generally, Colorado Health Insurance Insider’s Louise Norris describes what happened when her husband needed knee surgery. The savvy couple planned for every contingency, yet still they encountered a system failure in the form of an out of network charge.

Jaan Sidorov at Disease Management Care Blog has proposed a frightening, unintended consequence of health care reform which is that private health insurers might, like AIG, become too big to fail.

Sidorov thinks creation of a new public insurer will prompt a wave of consolidation in Big Insurance, and the remaining behemoths will seek cover in the form of regulatory oversight from the Feds.

Over at The Health Care Blog, Brian Klepper has contributed a wide-ranging historical perspective on efforts by Big Insurance to control health care cost escalation.

After characterizing utilization review and PCP gatekeeper systems as well-intentioned but poorly executed efforts, he proposes that tricked-out workplace-based clinics (“onsite clinics”) may be a solution, and cites facilities on the premises of Cigna as shining examples.

He concludes however, that the proof will be in the pudding. After all, everyone thought UR and gatekeepers were good ideas, too.

There’s a great, big, beautiful tomorrow,
Shining at the end of every day

There’s a great, big, beautiful tomorrow
And tomorrow’s just a dream away

Man has a dream and that’s the start
He follows his dream with mind and heart

When it becomes a reality
It’s a dream come true for you and me

Access, Cost Escalation
InsureBlog’s Bob Vineyard reviews interim results from Massachusetts’ much publicized universal health care plan, which many believe should be a model for national health care reform.  The plan has left at least 200,000 state residents uninsured while utterly failing to rein in costs. And to make it right Vineyard warns, Bay state lawmakers are either going to have to squeeze providers even more or (gasp!) ration care.

At Managed Care Matters, Joe Paduda has posted a dispassionate, fact-based treatise designed to calm the knee-jerk anxiety that normally surrounds concepts like universal health care and rationing.

He points out for example that Big Insurance already engages in rationing through pre-certification processes, provider agreements and so forth.

He then dismantles the claim that universal health care leads to longer waiting times for care. Paduda concludes that if we manage to institute such programs, “access will go up and waiting times may well go down.”

Amid a fusillade of jabs and an occasional uppercut to the jaws of the Big O and his admirers, JD Bell reveals over at It Takes Work that Howard Dean has launched a web site to promote his own vision for health care reform.

According to Bell, Dean is concerned the Big O is waffling on his campaign promises, and wants nothing more for the American people than what Obama promised them prior to November 4.

Writing for Workers’ Comp Insider, Jon Coppelmen observes that employers’ most effective tools for managing comp losses vanish after they lay off employees. The trust, indeed the entire relationship between employer and former employee, is lost. This leaves claims adjusters, who are typically overworked and not properly incented, to manage workers’ compensation costs.

With unemployment approaching historical levels, Copplemen’s antidote, three proactive steps employers can take to manage the regrettable situation, is timely indeed.

Quality and Safety
A recent NEJM article on the cost and quality implications of readmissions has prompted Maggie Mahar to review the subject over at Health Beat. Mahar summarizes the views of White House budget director Peter Orszag and others on the matter, and then offers several home-grown suggestions about how to tackle the problem.

Mahar explores for example, the concept of bundling payments to hospitals and physicians who are responsible for care immediately following discharge, and directing special attention towards states in which the readmission problem is particularly severe.

Novo Nordisk had been prepared to discuss cardiovascular complications at last week’s FDA advisory panel meeting regarding liraglutide, its new diabetes drug, but instead the drug’s association with rare tumors of the thyroid drove the discussion.

Jeffrey Seguritan at Nuts for Healthcare summarizes the surprising development then expands into an informative discussion of the efficacy with which drug trials assess cancer risk.

There’s a great, big, beautiful tomorrow,
Shining at the end of every day

There’s a great, big, beautiful tomorrow
And tomorrow’s just a dream away

Man has a dream and that’s the start
He follows his dream with mind and heart

When it becomes a reality
It’s a dream come true for you and me

Legal
HealthBlawg’s David Harlow is generally supportive of the deal struck by CVS and Google, in which prescription data from the retail pharmacy giant can now be directly imported into Google Health, the search giant’s personal health record. On balance Harlow says, the gains in patient safety and quality outweigh the increased risk of breaches in patient confidentiality, at least for people who have not recently given birth to octuplets or are named Britney Spears.

Health IT
When a healthcare journalist came down with a touch of bronchitis, he blew off the last vendor meeting at HIMSS and went to the doctor.

His encounter underscored a yawning gap between today’s reality of spotty EMR adoption and a future-state of nirvana that has been promised by so many. 

The real-life story appears at Niel Versel’s Healthcare IT Blog.

We hope Neil feels better, by the way.

At the Health Business Blog, David Williams has posted a transcript of his interview with Wayne Guerra, the co-founder and chief medical officer of Healthagen, the maker of a way-cool iPhone application known as iTriage.

In the interview, Guerra explains how his mobile triage and health information tool can be used, the types of people most likely to benefit from it, and how he hopes to monetize the idea.

The Healthcare IT Guy invited Paul Nuschke, a software design expert at the IT consultancy Electronic Link to comment on the subject of EMR usability. Nuschke asserts there are three keys: the EMR should be easy to learn, efficient, and prevent errors automatically.

Nuschke appends a series of baffling screen shots which make it laughably clear that some of the mainstream players in the space aren’t quite there yet.

Policy
Over at the Healthcare Economist, Jason Shafrin asks, “Why have disability rates decreased?” To answer the question, Shafrin reviews a scholarly piece from the National Bureau of Economic Research. He notes that the apparently heartening trend has occurred despite an increasing burden of illness in the general population. The beneficial trends, he concludes, are attributable primarily to non-medical advances like “internet shopping, amplifying devices for phones and street ramps” rather than health care-specific interventions.

Damn, we thought we had something there for a moment.

Actual US Health Care Carousel of Progress:

In 2005, Wal-Mart employees had to work 2 years before qualifying for the company health plan, which most considered to be an expensive joke, anyway.

Then, an activist group publicized a confidential company memo saying that health expenses could be cut by not hiring sick people.

This was going down just when towns were protesting store openings, unions were underwriting nasty campaigns, teachers were telling students to take their back-to-school business elsewhere and the company’s stock price was languishing.

But the world’s largest company has made great strides since then.

First, Wal-Mart cut the wait to enroll in the health plan to one year for part-timers and 6 months for full-timers. That made 50,000 more employees eligible in one year.

Then it expanded the menu of insurance coverage options and extended to some employees a credit of up to $500 to offset any health-related expense.

Next, it extended its popular $4 generic drug plan from the 350 drugs available to consumers to greater than 2,000 for employees.

The retailer subsequently cut a preferred-provider deal with Mayo Clinic of all places to cover transplant services for its employees.

The company’s latest foray, Life with Baby, targets premature birth rates among Wal-Mart employees, which are twice the national average.

Expecting moms get paired with a nurse who advises them on diet, smoking, stress reduction and the like. Lactation counseling and vaccination programs are available to moms after that.

“Wow, it was really good. It helped me so much,” Cristina Majano told the Washington Post. The 23-year-old new mom works for Wal-Mart in Virginia.

Nowadays, only 5.5% of Wal-Mart employees lack health insurance. That’s much lower than the national rate, which is 18%.

Nice job fellas!

Medicare Advantage providers like Humana, Cigna and UnitedHealthGroup have been receiving payouts that are 14% higher than what the government pays for other Medicare beneficiaries, and throughout his campaign the Big O said his administration was going to stop that.

It’s now become apparent that the Big O’s follow-through on campaign promises is just as pristine as that on his sweet lefty J.

In fact when Obama proposed a $634 billion down payment on universal health coverage last week, he accounted for $177 billion of the total by removing funds that had been designated in previous budgets to pay for those Medicare Advantage programs.

The private insurer’s fees had heretofore been established using secret sauce, but now the Big O’s proposing they’ll have to bid competitively beginning in 2012 for the contracts.

It’s the mother of all Heimlich maneuvers for Big Insurance, which knew something bad was gonna’ happen but expected a smaller hit and a slower phase-in.

Several companies threatened that the moves will force them to pull out of certain markets altogether, but that sounds a bit hollow since Advantage plans have been their only source of growth now that employer plan membership numbers are dropping like a stone.

So for the moment they’ve held fire. “We will be a constructive participant in efforts to reform all parts of Medicare,” a simmering Robert Zirkelbach told the Wall Street Journal.

Then the spokesperson for Big Insurance hinted at a possible counterattack strategy. “This proposal asks seniors to pay a disproportionate share of the cost of health-care reform,” Zirkelbach said.

Enrollment in Medicare Advantage plans grew 14% last year. Seniors were attracted by low premiums and plentiful benefits compared with relatively spartan government plans.

Nearly 25% of all Medicare beneficiaries are enrolled in these plans.

Humana stock dropped nearly 20% on the day the story broke. Aetna slid 11% and Cigna lost 9%.

Three nanoseconds after the House signed off on a bill extending the State Children’s Health Insurance Program to 4 million children from low-income families, the Big O signed it into law.

The House had voted something like 7 times since 2007 to expand the program only to be stoned by George W. Bush who believed it would lead to “government-run health care for every American.”

The House never could muster the votes to overturn his poison pen.

SCHIP, originally formed in 1997 with bipartisan support, is directed at kids in families that earn too much to qualify for Medicaid and not enough to afford private insurance.

Forty House Republicans voted for SCHIP. Two Democrats voted against it.

The Big O, still seething over l’affaire Daschle, trumpeted SCHIP as an indication how different things’ll be in his administration. Uh, once he finds people to fill the posts, that is.

California Democrat Henry Waxman chirped “while this bill is short of our ultimate goal of health reform, it is a down payment, and is an essential start.”

Meanwhile, Iowa Republican Steve King, derided SCHIP as “a foundation stone for socialized medicine,” and his buddy Tom McClintock of California added it was “slowly replacing employer health plans with government-paid health plans, with spiraling costs to taxpayers.”

The new SCHIP extends coverage to children and pregnant women who are legal immigrants, a rider that rankled a number of Republicans that had supported earlier versions.

To come up with the $32 billion required to fund the SCHIP expansion, the bill calls for Federal tobacco taxes to be jacked from 39 cents per pack to a buck. 

Remarkably, even after the SCHIP expansion is fully implemented, there’ll still be 5 million kids in the US who remain uninsured.

New rules promulgated last November obligate Medicare to pay for expensive cancer drugs in hundreds of situations where the drugs are not approved by the FDA.

Medicare now covers Eli Lilly’s Gemzar for 16 different cancers for example. The FDA approves the $5,000 per month drug for four.

And Genentech’s Avastin, which can cost twice that, will now be covered by Medicare for use in cancers of the ovary, brain and kidney. The FDA has approved no such thing.

The windfall is the result of Medicare’s new plan to delegate coverage decisions to a set of reference guides.  If one guide recommends it, Medicare pays unless another guide specifically says you’ve got to be crazy.

Medicare didn’t seem to mind that scientists it retained to study the guides found they “cited very little of the available evidence,” or that they varied markedly in their recommendations according to Amy Abernethy, a Duke oncologist who headed an investigation on the matter. Abernathy’s report is due out shortly.

And guess what? The editors of the guides have financial ties to Big Pharma!

One guide is produced by the National Comprehensive Cancer Network, for example. The Network routinely retains experts on the dole from drug companies.

Then there’s the American Hospital Formulary guide, compiled by the American Society of Health-System Pharmacists.

Last year, the Society inked a deal with a “Foundation” which  accepts $50,000 application fees in return for assuring the applicant’s favorite oncology drug gets reviewed by the guide within 90 days.

No word on whether applicants get their money back if the guide rejects their proposal. (more…)