Archives: July 2005
Sun Jul 31, 2005
Californias Single-Payer Bill Advances
The Heath Committee of the California Assembly, by 9-4 vote July 6, approved Californias single-payer legislation, according to People's Weekly World Newspaper Online.
As previously reported, the state Senate has already approved the bill.
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Sat Jul 30, 2005
Blue Cross: Minnesota Hospital Boom Favors a Few Specialties
A Blue Cross and Blue Shield of Minnesota study that shows a continued pattern of growth among Minnesota hospitals, focused in a few specialties.
�Metropolitan hospital facilities are continuing to expand and build at a fast pace, especially for specialties like cardiac care,� said Michael Morrow, senior vice president of business development and network management for Blue Cross. �More public discussion is needed by all affected parties regarding the kind and type of health care we want and need in Minnesota. We�re pleased to take this step to initiate this expanded dialogue.�
Blue Cross, the state�s largest insurer, has asked the Citizens League, a non-profit, independent public policy group, to create an expert study panel from all stakeholders, conduct independent research, involve citizens, and come up with recommendations for addressing hospital capacity issues. The intent of the study is to present information on hospital expansion and encourage broader public discussion of the issues related to expansion. �As a community, we have the opportunity to build the health care system we want, but we need broader community input to define and support that vision,� Morrow said.
�Healthcare is a critical public policy issue for Minnesotans,� said Sean Kershaw, president of the Citizens League. �Minnesota depends on high quality healthcare to sustain our high quality of life and we can�t allow rapidly increasing costs to put either of these in jeopardy. The Citizens League is excited by the opportunity to be part of the solution in looking at this issue. Blue Cross� work sets the stage for a larger effort to engage citizens and other stakeholders in this effort.
The Blue Cross study released today, called �Hospital Expansion in Minnesota: Is Growth Worth the Cost?� inventoried expansion plans since 2002 and benchmarked Minnesota hospitals against national averages.
Key findings of the report:
* One-third of Minnesota�s hospitals are growing. The report cited 56 of 148 Minnesota hospitals are planning or conducting new building or expansion projects since 2002 totaling $1.57 billion, continuing a sharp upward trend. The majority of expansion projects are in the Twin Cities metropolitan area.
* Much of the expansion occurs in a few specialties, for which Minnesota already exceeds the national average. For example, Minnesota has 28 percent more cardiac intensive care beds than the national average and yet 40 percent fewer psychiatric beds than the national average.
�We can make better informed decisions about the kind of hospital care we build so that it will result in higher quality, lower prices and better access,� Morrow said. �But it will take all of us working together for the benefit everyone.�
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Rep. Barbara Lee: GOP Health Bills Fail to Lower Health Costs or to Help Uninsured
Congresswoman Barbara Lee criticized two Republican measures considered in the House this week, saying the bills fail to lower health care costs or do anything meaningful to provide access to health insurance to the more than 45 million Americans who are uninsured.
�These bills are nothing more than window dressing, designed to hide the fact that when it comes to our nation�s healthcare crisis, Republican policies are more of a poison than a cure,� said Lee. �These bills do nothing to reduce healthcare costs or provide significant coverage to the more than 45 million Americans who live in fear of getting sick, because they have no insurance and can�t afford to go to the doctor.�
H.R.525, which the House considered on Tuesday, is designed to create Association Health plans and allow businesses to purchase health insurance policies at lower rates. According to the Congressional Budget Office, however, millions of small business would actually see their health insurance premiums increase due to cost shifting and cherry picking by AHPs.
Lee also pointed out that the measure would exempt association plans from state benefit requirements that assure coverage of women's health services such as contraceptive equity, cervical and breast cancer screening and treatment, STD screening, clinical trials, and emergency services.
�Not only does this bill fail to provide any significant coverage for the uninsured, it also puts women and girls at risk by pre-empting state laws that guarantee access to basic health services,� said Lee. �This bill overrides protections in 21 states that currently ensure access to contraceptives and treatments for sexually transmitted diseases, and there is nothing healthy about that.�
Lee also criticized H.R. 5, a measure to limit medical malpractice awards, particularly citing provisions that exempt drug makers from liability for products approved by the FDA.
�Not only does this measure limit the rights of legitimate malpractice victims, it fails to address insurance industry abuses and does nothing to lower healthcare costs,� said Lee.
Proponents claim malpractice suits increase healthcare costs, despite ample evidence to the contrary. According to the CBO, malpractice costs account for a very small fraction of total health care spending, and even a significant reduction in malpractice costs would have a relatively small effect on total health plan premiums.
Lee is a co-sponsor of three Democratic bills aimed at Expanding health care access for small business employees, Expanding health care access for low-income working parents and Expanding health care access for those aged 55 to 65 that together would reduce the number of uninsured by more than half.
Earlier this year, Lee, who has long been a leading voice in the fight to make access to healthcare universal, reintroduced H.R. 3000, the United States Universal Health Service Act. The measure, which would establish a United States Health Service (USHS) and provide health coverage for all Americans, was first introduced in 1978 by her predecessor, Rep. Ron Dellums, and has been a priority for Lee since her election in 1998.
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Singapore: Medical Tourism Takes Off
Singapore is becoming a major center for medical tourism. For example, stem cell treatment for advanced cancer tumors costs $72,000 to $90,000 there while it would cost $235,000 in the United States, according to Express Healthcare Management.
Medical tourism also is growing in Malaysia, Thailand and India, it adds.
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Fri Jul 29, 2005
Health IT World: Medicare NOT to Provide Doctors with Free Software
Disputing a report previously published by the New York Times, Health IT World reports that Medicare will charge doctors $2,700 for a version of the Department of Veterans Affairs medical records software.
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Thu Jul 28, 2005
Canada Spends Among the Highest on Health Care When Compared With Other Universal Health Programs but Ranks Low on Key Performance Indicators
Canada spends more on health care than any other industrialized country providing universal access save Iceland and Switzerland, yet ranks low in measures of access to care, according to How Good is Canadian Health Care? An International Comparison of Health Care Systems (2005 Report) released Thursday by The Fraser Institute.
�Canadians are being short-changed under our current health care system. Despite spending more than almost every other developed nation on health care, Canadians are experiencing inferior access to physicians and technology and suffering very long waits for treatment. Canada is also less successful in reducing deaths from preventable causes than other developed nations,� said Nadeem Esmail, co-author and senior health policy analyst at the Institute.
The study compares Canada to other OECD countries that guarantee access to health care regardless of ability to pay. Twelve indicators of access to health care and outcomes from the health care process are examined including access to physicians, access to high-tech medical equipment, and key health outcomes.
Many of the countries examined produce superior outcomes in health care and at a lower cost than Canada. Other industrialized countries with universal access programs, such as Sweden, Japan, and Australia, allow user fees, some form of private insurance, and private hospitals that compete for patient demand. These three countries consistently outperform Canada on health outcomes but spend less.
�This evidence supports the Supreme Court�s recent conclusion that private health insurance does not need to be outlawed in order to �protect� Medicare. It is striking to note that amongst industrialized countries, only Canada outlaws a private parallel health care system for its citizens,� noted Esmail.
Health Care Spending
The average age of a country�s population is a major determinant of the amount of money it will have to spend in order to provide adequate health care. In Canada, those aged 65 and over consume more than 44 percent of health care expenditures yet make up only 12.7 percent of the population.
After adjusting for the age of the population, Canada spends 10.7 percent of GDP on health care, the third highest among developed nations with universal access health care programs.
Comparing Health Outcomes
In this study, seven outcome measures have been used to rank the performance of the OECD countries.
Canada ranks twenty-second in the percentage of total life expectancy that will be lived in full health; twentieth in infant mortality; twelfth in perinatal mortality; fourth in medically avoidable deaths; eighth in potential years of life lost to disease; tenth in the incidence of breast cancer mortality, and second in the incidence of mortality from colorectal cancer.
The evidence presented in this study suggests that health care expenditures can be significantly reduced if consumers of care help to pay for the care they demand. In banning user fees, Canada is very much in the minority. More than three-quarters of the countries in the OECD that provide universal access also charge user fees for access to hospitals, general practitioners, or specialists and, in many cases, to all three. In most cases, low-income citizens are exempted from paying user fees.
The Number of Doctors
On an age-adjusted basis, Canada has among the fewest number of physicians in the OECD. Canada ranks twenty fourth out of twenty-seven countries with 2.3 doctors per 1,000 people for a total of 66,289 doctors. To be comparable to first-placed Iceland, Canada would need 53,663 more doctors, an 81 percent increase over the current level.
In 1970, when public insurance first fully applied to physician services, Canada placed second among the countries that could be ranked in that year.
Access to Technology
In terms of age-adjusted access to high-tech machinery, Canada performs dismally. Canada ranks thirteenth out of twenty-two countries in access to MRIs; seventeenth of twenty-one in access to CT scanners; seventh of twelve in access to mammographs, and is tied for last in access to lithotriptors. Lack of access to machines has also meant longer waiting times for diagnostic assessment, and mirrors the longer waiting times for access to specialists and to treatment found in other comparative studies.
�It is astounding that Canadians continue to commit themselves to the status quo for Medicare, when other nations manage to deliver so much more for less money. We should be looking at incorporating successful policies from other countries, such as cost sharing and competition, in order to fix our ailing health care system,� Esmail pointed out. �Canada should emulate these more successful models.�
Click here for the related figures.
Established in 1974, The Fraser Institute is an independent public policy
organization with offices in Vancouver, Calgary, and Toronto.
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$40,000 Procedures Done for $6,400 at Thailands Bumrungrad Hospital
The International Herald Tribune features Thailand's Bumrungrad Hospital, a leading center for medical tourism.
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Wed Jul 27, 2005
Reinsurance: A Tool to Make Individual and Small Group Insurance More Affordable
States, by offering reinsurance - essentially insurance for insurance companies - can make it possible for lower cost insurance to be offered to small groups or to individuals, according to a Commonwealth Fund report.
Small groups can pose great risks to insurers. Therefore, small group and individual medical insurance often is more expensive than large group insurance. States, through reinsurance, can spread those risks - making them easier for insurers to handle.
According to Harvard School of Public Health Professor Katherine Swartz., the author of the report, Reinsurance: How States Can Make Health Coverage More Affordable for Employers and Workers, New York and Arizona already have adopted reinsurance programs.
Her report aims to inform readers about the mechanics of reinsurance, the experience these two states have had with their programs, and issues states should consider before implementing reinsurance programs.
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Accellerated Nursing Degree Program Attacks Nursing Shortage
Clinical nursing instruction will be reduced from five semesters to three at Grand Valley State University's Kirkhof College of Nursing, according to the Grand Rapids Press.
As previously reported there not only is a shortage of nurses but of nursing instructors. Accelerating nursing programs would increase the productivity of each instructor - assuming that this accelerated program teaches as well.
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Tue Jul 26, 2005
Study: Health Care for Immigrants is Lower Than for U.S. Citizens
Despite arguments that providing health care to immigrants is burdening the nation's economy, a recent study found health care expenditures for immigrants are far lower than those for U.S.-born citizens, according to the American Journal of Public Health.
Researchers used data from the 1998 Medical Expenditure Panel Survey and analyzed health expenditures for more than 18,000 U.S.-born citizens and almost 3,000 immigrants. The results: per capita total health care expenditures of immigrants were 55 percent lower than for U.S.-born people, and expenditures for uninsured and publicly insured immigrants were about half that of their U.S.-born counterparts. Immigrant children had 74 percent lower per capita health expenditures than U.S.-born children. The findings suggest that immigrant children are sicker when they arrive in the emergency room, probably because of little access to primary care. Emergency department visits were less likely for immigrant children, than for US-born children; however, per capita emergency department expenditures were higher because their costs per visit were higher.
"Our study refutes the assumption that immigrants represent a disproportionate financial burden on the U.S. health care system," the study's authors wrote. Yet the findings do show a disparity when it comes to immigrants' access to care.
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West Virginia Launches High Risk Benefit Pool
Governor Joe Manchin III has announced AccessWV, a new, high-risk benefit pool for West Virginians who cannot obtain medical insurance elsewhere, according to the Insurance Journal.
According to the plan overview, AccessWV began operations on July 1, 2005 and coverage for the rst enrollees begins on August 1.
Coverage extends to West Virginia residents who meet specified conditions - generally those who cannot obtain insurance elsewhere. The plan overview specifies these conditions.
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Auto Suppliers Health Costs To Soar 60 Percent by 2010
"U.S. auto suppliers, who employ eight out of 10 workers in U.S. auto manufacturing, are now paying 60 percent more for employee health care than five years ago. They can expect their health costs to rise an additional 60% by 2010, unless solutions are implemented," according to Sean McAlinden, vice president of research for the Center for Automotive Research, (CAR)..
He stated these figures in a CAR press release.
His figures are from a survey of suppliers, funded by the Ernst & Young Global Automotive Center, that indicates despite a wide range of efforts from better purchasing leverage over health care vendors to employee cost sharing, suppliers continue to expect double-digit annual health care inflation through 2010. Thirty-seven member companies from the Original Equipment Suppliers Association, (OESA), were surveyed.
"Health care expenditures will remain an important competitive issue for suppliers," said David Andrea, vice president of business development, OESA. "The suppliers are stepping up their efforts to better manage their purchased health care services, asking their employees to share coverage, and looking for alternative models such as association programs."
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New Wave of Drugs Offer Hope at High Price
A new wave of drugs, known as specialty pharmaceuticals or biologics, derived from genetic engineering, offer hope to treat such illnesses as cancer, multiple sclerosis, rheumatoid arthritis and psoriasis. However, they cost ten times as much as such current drugs as Lipitor and Prilosec, according to the Detroit Free Press.
As previously reported, the effectiveness of many of these new, hyper-expensive cancer drugs is unclear and some question whether the high cost is justified.
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Mon Jul 25, 2005
Hackers Violate Computer Holding Medical Records for 42,000 U of Colorado Students and Staff
Someone gained unauthorized access to a server at the University of Colorado's health center. It contained records for 42,000 university students and staff. The breach was reported on July 14, according to DenverChannel.com.
Reportedly, another server at the university's college of architecture also was violated.
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Washington Post: Medicare Payment Structure Subsidizes Bad Medicine
According to the Washington Post, Medicare's payment structure causes it to subsidize bad care. The article is vague both as to what the problem is and what the solution should be, but apparently, Medicare's fee-for-service pay structure is the problem and either capitation, pay-for-performance, or pay for adherence to guidelines is the solution.
The Post's article cites and appears largely to be based upon a Dartmouth study published in Health Affairs last year. According to a press release, which is set forth in the "More" section below:
States spending more money per Medicare beneficiary are likely spending those dollars on intensive, expensive care instead of more effective care. In addition, high-spending states are likely to have a greater concentration of specialists, according to the study�s authors.
The study, which examined state-level differences in spending per Medicare beneficiary and the quality of care provided, found that higher spending did not translate into higher quality. For example, New Hampshire, which spent about $5,000 per Medicare beneficiary in 2001, had the highest overall quality ranking, while Louisiana, which spent the most per Medicare beneficiary at $8,000 per person, had the lowest overall quality ranking.
The study found that states with relatively more general practitioners show greater use of high-quality care and lower spending per beneficiary. Increasing the presence of general practitioners in a state by 1 per 10,000 people is associated with a rise in the state�s quality ranking and a reduction in overall spending of $684 per beneficiary. Conversely, increasing the presence of specialists by 1 per 10,000 people leads to a drop in overall quality and an increase in spending of $526 per beneficiary.
Among the study�s findings:
� States with lower spending often had better-quality care � such as higher use of interventions and screening methods, including prescribing beta-blockers at hospital discharge for patients treated for a heart attack, ordering mammograms every two years for women ages 65-69, and conducting regular hemoglobin tests and biennial eye exams for people with diabetes
� States with higher spending and lower-quality care had more frequent hospitalizations and use of intensive care units (ICUs) for patients in the last six months of life
� Medicare patients in states that spent $1,000 more per beneficiary spent an average of 1.3 more days in the hospital and were 3.9 percent more likely to be admitted to an ICU
The researchers based their analysis on twenty-four quality measures developed by the Medicare Quality Improvement Organization (QIO), as well as data from the Dartmouth Atlas of Health Care on the number of days Medicare beneficiaries in their last six months of life spent in a hospital and what fraction of them are admitted to the ICU.
While the study finds a link between higher spending and lower-quality care, the researchers emphasize that cutting Medicare spending as a way to improve quality could have the undesirable effect of reducing the quality of medical care in high-spending states even more.
Instead, the authors suggest concentrating on policies that improve the quality of care for beneficiaries, such as establishing national practice benchmarks for basic quality measures and encouraging greater access to general practitioners.
As previously reported, economist Arnold Kling asserts that differing payment structures motivate doctors to provide differing types of care. The Dartmouth study seems to be suggesting that Medicare should abandon what Kling calls "activist medicine" for adherence to quality standards.
However, the Post's article cites favorably an HMO, HealthPartners, which appears instead to be paid on a capitation basis. Other parts of the Post's article appear to cite favorably pay-for-performance concepts - that health care providers should be compensated according to the results they achieve.
So the Post's point is unclear. More...
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Sat Jul 23, 2005
Heritage Foundation: Association Health Plan Legislation Would be "A Good Start"
According to the Heritage Foundation, "The House of Representatives will soon consider a major package of health care bills. The package, if enacted, would significantly improve the functioning of America�s health insurance markets and establish a solid foundation for further transformation of America�s health care system."
This is the same legislation, which the Georgetown University Health Policy Institute called "a license to steal."
The association health plan legislation before the House would, among other things, for health insurance offered by associations such as Chambers of Commerce or trade associations, replace current state regulation with new federal regulation. This new federal legislation would be less strict than often stringent state regulations.
While Georgetown University says this looser regulation would encourage abuse; the Heritage Foundation says is would make insurance less expensive.
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Fri Jul 22, 2005
Georgetown University Study Finds Federal AHP Legislation Would Lead to More Health Insurance Scams, Threaten the Health Coverage and Financial Security of Millions of Americans
Federal association health plans (AHPs), as proposed in legislation currently
before Congress, would make the problem of health insurance scams in the United States much
worse, according to a Georgetown University Health Policy Institute study released Thursday at a
briefing in Washington, D.C.
A press release states �The regulatory approach contemplated in the AHP legislation would leave many businesses and workers at the mercy of scam operators. The consequences are predictable: bankruptcy, delayed or foregone medical care, and loss of coverage for America�s businesses and workers,� study author Mila Kofman concludes in her report entitled, �Association Health Plans: Loss of State Oversight Means Regulatory Vacuum and More Fraud.� Kofman is an assistant research professor at Georgetown University and a national expert on health insurance scams. In discussing the report�s findings at the press briefing, Kofman stated, �The AHP legislation is a license to steal.� Kofman went on to say that the new oversight strategy proposed in the legislation is based on �self-reported information and self-regulation� and that �crooks won�t be notifying the feds of lying, cheating, and stealing.�.
Since ERISA�s enactment, there has been a long history of fraud related to multiple employer welfare arrangements, including AHPs. �The history of scams involving associations demonstrates that when the federal government has had sole oversight authority, fraud flourished with unscrupulous individuals leaving businesses and their workers without health insurance coverage and with millions of dollars in unpaid medical bills,� Kofman writes in the report..
Between 2000 and 2002, this national problem affected more than 200,000 policyholders (number of people unknown) and left businesses and workers responsible for $252 million in medical bills. States shut down 41 illegal operations selling coverage through phony and real associations, while the U.S. Department of Labor shut down three entities. According to the report, the bill would prohibit states from shutting down health insurance scams and prohibit states from making it illegal to sell phony insurance to federal AHPs. Instead, the U.S. Department of Labor would be responsible for regulating this area. Kofman asserts in the report that this would create a �regulatory vacuum� and result in �the unintended consequence of widespread fraud threatening the financial security of millions of Americans.� States currently have the authority and resources to prevent, identify, and shut down fraudulent insurers, whereas, these same tools cannot be replicated at the federal level and would be lost under federal AHP legislation..
The study states that the reliance on self-reported information and self-regulation that would result if the AHP legislation is enacted �would make it almost impossible for the federal government to prevent conmen from obtaining a federal license.� The report notes that the AHP proposal does not prohibit repeat offenders from becoming certified. The bill restricts federal courts� ability to order non-complying AHPs to shut down and creates a new vague preemption standard in ERISA, which would create new opportunities for criminals to hide behind. When found, criminals would use the expanded �ERISA shield� even when not covered by ERISA. �Being federally certified is akin to a seal of good housekeeping,� Kofman states in the report. �Criminals would use their federal certification to attract customers, taking advantage of unsuspecting businesses.�.
�The principal goal of insurance regulation is to protect consumers. It is in this critical area that federal AHP legislation fails so miserably,� said Sandy Praeger, Kansas commissioner of insurance and secretary-treasurer of the National Association of Insurance Commissioners..
�Simply put, allowing federal AHPs to operate outside the authority of state regulators will expose consumers to more fraud and insurance scams. This is not just speculation but fact borne of years of experience with multiple employer welfare arrangements, association plans, out-of-state trusts and other schemes to avoid or limit state regulation.� Praeger participated in the briefing to release the report..
Several victims of health insurance scams put a face on the findings in the report. Janice Ramsey, who is self-employed, lost about $21,000 in premiums and unpaid medical bills. Janice was one of 40,000 people covered by American Benefit Plans (ABP), an illegal arrangement that sold coverage through existing and phony professional associations. Janice bought ABP�s coverage through an existing association..
Jill and Brent Burgess had to file for bankruptcy and lost their small business as a result of a health insurance scam. They were covered by Vanguarde Asset Group, an illegal arrangement whose operator in 2000 pled guilty to embezzling millions from a health plan and promised the U.S. Department of Labor not to do it again. The same year the operator pled guilty, the individual established a new illegal arrangement, in which the Burgess family enrolled. Both scams were shut down by the states..
To view the report and related materials from the press briefing, visit
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Senate Commerce Committee Votes 14-8 to Legalize Drug Re-Importation
U.S. Senators Byron Dorgan (D-ND) and Olympia J. Snowe (R-ME) Thursday won approval by the full Senate Commerce Committee for their plan to allow re-importation of lower priced prescription drugs. The lawmakers added the bill as an amendment to the legislation reauthorizing the Federal Trade Commission (FTC), according to a press release.
The amendment is similar to bipartisan prescription drug importation legislation by Dorgan and Snowe, the Pharmaceutical Market Access and Drug Safety Act (S. 334). The Commerce Committee passed the amendment by a vote of 14 to 8.
The Committee also adopted, without objection, a package of three second-degree amendments offered by Senator Vitter (R-La.) to the Dorgan-Snowe amendment. ( Vitter's 1st, 2nd, and 3rd.)
�Today�s action makes clear there is strong, bi-partisan support for this legislation in the Senate,� Senator Dorgan said after the committee�s vote. �U.S. consumers are charged the highest prices in the world for prescription drugs and it is unfair. Our goal is to put downward pressure on drug prices.�
�Today�s action by the Commerce Committee is a great step forward,� said Snowe. �I joined Senator Dorgan in introducing this amendment because people across this great nation want safe access to affordable prescription drugs. Despite broad recognition of the need - despite six years of legislative efforts - our constituents continue to wait for the federal government to act. Many Americans have lost patience leaving nearly half the states across the country with no choice but to consider implementing their own drug importation programs, including my own great state of Maine. But this is a federal issue, and that is why there has been bipartisan support in Congress to pass legislation to ensure safe access to affordable medicines.�
The Pharmaceutical Market Access and Drug Safety Act would allow individuals to directly order medications from outside the U.S. when using a Food and Drug Administration (FDA)-registered and approved Canadian pharmacy. FDA would examine, register and inspect these facilities on a frequent basis. FDA would also ensure the highest standards for such essential functions as recording medical history, verifying prescriptions, and tracking shipments. It would also allow U.S. licensed pharmacists and wholesalers to import FDA-approved medications from a number of major industrialized nations and pass along the savings to their customers.
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Thu Jul 21, 2005
NYT: Medicare to Provide Doctors with Free Software
According to the New York Times, Medicare will provide doctors with a free version of Vista, the record-keeping software used by the Department of Veterans Affairs.
The Times states, "There is no one in medicine who does not consider it both crucial and long overdue to have electronic records in doctor's offices and hospitals."
However, the Sydney Morning Herald has reported that there have been privacy breaches in Australia's electronic medical records system.
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Study: "Good" Hospitals Not Easy to Identify
A Commonwealth Fund�supported study published today in the New England Journal of Medicine finds that "good hospitals" are difficult to identify, according to the Fund.
According to the nationwide study, quality tends to vary from region to region. The Northeast and Midwest tended to outperform the South and West. Hospitals that provide high quality service in one type of care may not do so in others.
In the study, "Care in U.S. Hospitals�The Hospital Quality Alliance Program," researchers based at the Harvard School of Public Health and Boston's Brigham and Women's Hospital examined 10 measures that reflect quality of care for three major clinical conditions: acute myocardial infarction, congestive heart failure, and pneumonia.
"These data do not provide support for the notion that 'good' hospitals are easy to identify or consistent in their performance across conditions," the authors conclude.
Comment: Many health care reform proposals now under consideration would have patients shop for the best health care. This study, if correct, suggests that such shopping would be difficult and problematical.
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Report: Systems Engineering is the Solution to Health Care Crisis
The U.S. health care industry has neglected engineering strategies and technologies that have revolutionized quality, productivity, and performance in many other industries, says a new report from the National Academies' National Academy of Engineering and Institute of Medicine. This "collective inattention" has contributed to serious consequences in health care -- nearly 100,000 preventable deaths per year, outdated procedures, about a half-trillion dollars wasted annually through inefficiency, costs rising at roughly three times the rate of inflation, and 43 million people uninsured. Health care professionals and engineers should work more closely together to address these challenges, said the committee that wrote the report, according to a press release.
"The health care sector is deeply mired in crises related to safety, quality, cost, and access that pose serious threats to the health and welfare of many Americans," said Jerome H. Grossman, committee co-chair and senior fellow and director of the Health Care Delivery Policy Program, Harvard University, Cambridge, Mass. "Unfortunately, the health care system has been very slow to embrace engineering tools and clinical information technologies that could transform it from an underperforming conglomerate of independent entities into a high-performance system."
"Systems-engineering tools," developed for the design, analysis, and control of complex systems, have been used by many industries to improve the safety and quality of products and services and to lower production costs. These same tools, in certain circumstances, have been shown to improve the quality and efficiency of health care. If adapted and widely adopted, they could help deliver care that is safe, effective, timely, efficient, equitable, and patient-centered -- the six "quality aims" envisioned in a landmark report by the Institute of Medicine, Crossing the Quality Chasm: A New Health System for the 21st Century -- the report says.
"While medicine has advanced rapidly in recent decades thanks to new diagnostic and therapeutic technologies developed by engineers, the health care industry has virtually ignored a broad spectrum of other technologies that could radically improve the safety and efficiency of health care," said W. Dale Compton, committee co-chair and Lillian M. Gilbreth Distinguished Professor Emeritus of Industrial Engineering, Purdue University, West Lafayette, Ind.
Cultural, organizational, and policy-related barriers have impeded the widespread use of systems-engineering tools and information technology in health care, the report says. Health care professionals often fail to recognize that they are part of a larger system and most engineering professionals have a limited understanding of the complex challenges involved in health care. To encourage health care providers to use systems-engineering tools, organizations that have already adopted or promoted the use of such tools -- such as the Veterans Health Administration, the Institute for Healthcare Improvement, and the Agency for Healthcare Research and Quality -- should increase their outreach efforts to educate the larger health care community.
The health care sector remains woefully underinvested in information and communications technologies, the committee noted. Government and private-sector organizations should accelerate implementation of the National Health Information Infrastructure, a 10-year initiative developed by the U.S. Department of Health and Human Services to improve the overall quality of health care, facilitate the exchange of data among health care organizations, public and private payers, regulatory bodies, and the research community, and enable patients to become more active partners in their own health care, the report says. The health care community should also take advantage of emerging technologies based on wireless communications and microelectronics to improve the lives and care of patients, especially the elderly and patients with chronic illnesses, who require continuous monitoring and care.
The transformation of the health care system will require dramatic changes in the education and training of health care professionals, engineers, and managers and in the way innovation in health care delivery is advanced, the committee said. To hasten this transformation, the federal government, in partnership with the private sector, universities, federal laboratories, and state governments, should establish multidisciplinary centers at institutions of higher learning to bring together researchers, practitioners, educators, and students in engineering, health sciences, management, and the social and behavioral sciences. A lead government agency should be identified to coordinate the activities of these centers and ensure that funding is stable and adequate, the report says.
"If the nation takes up the challenge to transform the health care system now, current crises can be abated -- costs can be cut, the number of uninsured can be reduced, and more Americans can have access to the quality care they deserve and that we are capable of delivering," said Grossman.
The study was sponsored by the National Science Foundation, Robert Wood Johnson Foundation, and the National Institutes of Health. The National Academy of Engineering and Institute of Medicine are private, nonprofit institutions that provide science, technology, and health policy advice under a congressional charter. A committee roster follows.
Copies of Building a Better Delivery System: A New Engineering/Health Care Partnership will be available in the fall from the National Academies Press; tel. 202-334-3313 or 1-800-624-6242 or order on the Internet at http://www.nap.edu
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Wed Jul 20, 2005
Australia: Proposed Australian Capitation Payment Strategy Could Lead to Rationing
The Australian Health Care Association says a proposed change in the Australian healthcare system to establish "fundholding", a capitation payment system for doctors, could lead to rationing of healthcare, according to the Sydney Morning Herald .
That would make Australia's health care system more like the British, which reportedly suffers from medical rationing.
While Australia's health care payment system also is government run, it currently has a fee-for-service payment structure.
In capitation, a doctor gets paid a fixed amount for each patient, regardless of how much treatment that patient receives. In fee-for-service, the doctor gets paid a fixed amount for each item of service.
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Open Source: It's Not for Healthcare
For electronic health records, healthcare providers, preferring instead commercial Microsoft and Unix vendors, have so far shunned Linux and other open source software, according to LinuxInsider.com
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Report: Proposed Massachusetts Health Plan Fails to Constrain Medical Costs
Alan Sager and Deborah Socolar, Directors of the Boston University School of Health Health Reform Program Wednesday presented a report to the Massachusetts legislature criticizing Governor Mitt Romney's proposed universal health care plan. They say it fails to constrain medical costs.
A single-payer plan would be better able to constrain costs, they added.
The summary of their report is as follows:
As health care spending in Massachusetts has soared to $1 billion per week,
18.5 percent of personal income, the numbers of people uninsured and underinsured have grown. The challenge is to use today�s vast resources to cover us all well. But proposals that enjoy good political currency would fail to do so.
The governor talks about expanding health insurance coverage while controlling cost, but his proposal seems likely to hike spending and to provide only partial benefits (and high out-of-pocket costs) for many. This might be called a recipe
for O-Mitted Care.
This failure should not discredit the aim of making health care affordable for all in
Massachusetts without increasing spending. Indeed, the Commonwealth already has the dollars and the doctors�and the competence and compassion�to finance the care that works for all the patients who need it.
Consolidated financing is the best foundation on which to begin to build durable and sustainable medical security for all who live in this state. It offers a framework in which we can squeeze out and recycle much of the half of health spending now wasted.
In past years, experts debated whether health care reform should emphasize universal coverage, or cost control, or both at the same time. Many experts long thought that it was reasonable to pursue universal coverage first. Political support for cost control�either alone or married to coverage expansions� seemed too weak. After covering everyone, cost controls could follow.
The 1988 Massachusetts universal health care law, signed by then-Governor Dukakis, was an example of that approach. Unfortunately, the 1988 law could not be implemented, largely because it did not contain costs. Indeed, it immediately increased them by giving hospitals very large payment hikes.
Massachusetts may now be in danger of again passing a law that promises coverage to all but that cannot be affordably implemented. Even worse, while the 1988 law at least promised full benefits to almost everyone, the governor�s current proposal does not. It would offer only partial benefits to many of those it would newly cover, accompanied by both high out-of-pocket costs and increased total spending. (And it would likely catalyze further de-insurance, setting an example that private payers and the existing Medicaid program could imitate.)
Without cost controls, expanding coverage requires some combination of higher spending and watered-down benefits. But weak benefits and high out-of-pocket costs are a formula for cruelly and unfairly rationing health care by ability to pay.
Therefore, we believe it is no longer responsible to propose universal health care coverage in Massachusetts without also proposing fair, effective cost controls.
Owing to high health care costs in our state, there seems today to be no overlap between what is politically achievable and what is financially workable. It seems that the bills that have the most political support because they promise some coverage for all can�t work because they don�t contain cost, and the bills that could work because they offer universal coverage and cost control can�t pass.
Workable cost controls would challenge the way money is spent in health care today because they would capture dollars that are now wasted. All money now spent on health care�even the one-half that is wasted�is income to some party. Workable cost controls are therefore opposed politically by those who fear the loss of this money.
It is unrealistic to continue to talk only about coverage and about money. It is essential to work also to contain cost and to reform the actual delivery of care. Winning durable health insurance coverage for everyone in Massachusetts requires addressing cost control. Because much money is wasted today on unnecessary care for insured patients, even as many others are under-served, financing that coverage requires addressing the actual delivery of care. This report describes ways to do so.
It is both tragic and totally unnecessary that any person in Massachusetts should suffer avoidable pain, disability, or premature death for lack of needed health care. With the highest health spending per person in the world, we in
Massachusetts can find ways to squeeze out waste, empower physicians to spend money much more carefully, and pool financing in order to cut administrative waste and cover everyone.
This report makes ten main points�
1. Massachusetts health care is the costliest of any state�s, so the costliest on earth�triple the spending per person in Britain, Italy, and Japan. This year�s health spending in Massachusetts is about $52.7 billion (about double the total state budget). That is $1 billion each week. It should be enough to provide good coverage for all who live here. Yet some 7-10 percent of this state�s residents are uninsured and growing numbers are under-insured.
2. The governor�s proposal only pays lip service to the idea of covering us all well without higher spending. It would actually raise spending while leaving most newly-insured people without adequate protection. It skates lightly over the cost problems we face, lacking provisions to address sources of high costs and waste. It sets a dangerous precedent of accommodating our high costs by adopting skimpy coverage. This might win a short-term political numbers game by counting people presumably insured, but it would worsen the trend toward widespread under-insurance and rationing care by ability to pay. Our governor, like many failed generals, is calling his proposal an advance, but it is really yet another retreat from the fight to contain costs.
3. Here and nationally, health care consumes a growing share of the economy. Assuring full, durable coverage for all requires tackling this unsustainable burden. Family insurance premiums here doubled in 6 years. Health costs grew from 15.6 percent of personal income here in 2000 to 18.5 percent in 2003-04. Massachusetts Senate Bill 755 is the only bill offering serious cost controls.
4. Contingency planning is essential�now. Massachusetts health care is addicted to more money each year to finance business as usual. Yet that pays for less care for fewer people, while caregivers complain they are underpaid. It is unrealistic to assume there will continue to be more public and private money for health care. But health care here is badly prepared to cope with the effects of an economic downturn. A financial crisis would be the worst time to design affordable health care for all and protect all needed caregivers. Health care finances may be squeezed sharply�or gradually. Patients, payers, and caregivers all deserve a plan to put our care on a stable footing.
5. That can be done. About half of health spending nationally is wasted�on unproductive paperwork generated by the way we pay for care, on fraud, on unnecessary services, and on excessively high prices. Reallocating the wasted sums is vital to providing needed care to all and stabilizing caregivers. In Massachusetts, wasting half of health spending means wasting about $26 billion this year, roughly equal to the state budget. Cutting waste from about 50 percent of health spending to 20 percent ($10 billion this year) would free nearly one-third of current spending to expand care for people now uninsured and under-served.
6. A major cause of this state�s high costs is our use of extremely specialized caregivers. We rely heavily on teaching hospitals and specialist physicians.
7. The aim of health care cannot be immortality�but medical security is achievable. Consolidating the many streams that now finance care provides the best foundation on which to build medical security. This is partly because it quickly wins huge administrative savings, which can be used to finance expanded coverage. Spending to administer health care financing would fall about 45 percent. This would permit a large rise in spending on actual care� about 9 percent overall and about 25 percent for physician care, we have estimated. Pooling the money also makes it much easier to lower drug prices, reduce fraud, and, most important, encourage and enable doctors to spend money carefully to provide the care that works to all who need it.
8. Eliminating unnecessary care�and using those resources instead to serve patients now under-served�is vital to keep care affordable. Doctors must play the central role in eliminating wasted services. Shifting costs to patients cannot contain total costs, promote appropriate care, or protect caregivers. Doctors� decisions control some 87 percent of the health dollar. Engaging doctors is therefore essential to containing cost and covering all people.
9. Legislators and state health care officials must start and sustain a mature political, financial, and clinical conversation about how to contain cost, make coverage for all who live here durably affordable, and sustain all needed hospitals, doctors, nurses, long-term care providers, and other caregivers. It is both vital and feasible to address these issues at the state level. It is vital because Congress is not going to act soon in useful ways. And as health care melts down, more and more parties will demand state action. It is feasible because state government has important financial and political influence on health care, and because it can persuade all stakeholders to come to the table.
10. The aim of providing coverage to all in Massachusetts has again won political visibility. But the universal coverage horse has many riders. These include hospitals, doctors, and nursing homes that seek higher Medicaid payments, and employers and insurers that want to cut their payments to the Uncompensated Care Pool. Most proposals combine increased coverage with increased payments to caregivers and increased cost. They reflect a contrived appearance of consensus that won�t endure. Fulfilling any promise of much new money seems unlikely. A similar combination shaped the 1988 Massachusetts law that promised universal health care but never delivered.
� The 1988 law failed politically because its coverage expansions were to begin years later, but higher hospital payments began immediately, letting hospitals withdraw support for implementing the access provisions.
� It failed financially because its coverage expansions relied on implausible new spending�instead of squeezing out and recycling waste in what was even then the costliest state.
We must not re-draw that fatally flawed design.
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Tue Jul 19, 2005
The NHS and You
The Scottish arm of the British National Health Service (NHS) has published a pamphlet entitled 'The NHS and You', which provides an introduction to its services.
Perhaps of greatest interest are the standard waiting times for treatment in Scotland. They are as follows:
The Health Department has set targets for the whole of Scotland which set out how quickly you should be able to get certain kinds of appointment, test or treatment. These targets are as follows:
Contacting your GP surgery
*When you contact your GP surgery, you should be able to see or speak to someone for advice within two working days. The surgery team will decide who they think is best suited to deal with your problem. This could be a GP, a practice nurse, or someone else.
*By the end of 2005, you should not have to wait more than 26 weeks from a GP referral for a hospital outpatient appointment.
* By the end of 2007, you should not have to wait longer than 18 weeks from a GP referral for a hospital outpatient appointment.
Hospital inpatient and day case treatment
*You should not have to wait more than nine months for inpatient or day case treatment.
*By the end of 2005, you should not have to wait more than six months for inpatient or day case treatment.
*By the end of 2007, you should not have to wait more than 18 weeks for inpatient or day case treatment.
Accident and Emergency department
*By the end of 2007, when you arrive at an Accident and Emergency (A&E;) department, the longest you will wait is four hours before being admitted to a ward, discharged or transferred to another hospital.
*By the end of 2007, if you are referred by your GP or optometrist for cataract surgery, you will not have to wait more than 18 weeks.
*By the end of 2007, if you fracture your hip and are admitted to a specialist orthopaedic unit for surgery, your operation will be carried out within 24 hours.
*If you see a specialist and they refer you for angiography, you will not have to wait for more than eight weeks to have this done.
* If you have angiography done and you then need a heart bypass operation or angioplasty, you will not have to wait more than 18 weeks after the angiography for this.
*By the end of 2007, if you are being referred by your GP for treatment through the rapid access chest pain clinic, you will not have to wait formore than 16 weeks.
* By the end of 2007, if you are being referred by a heart specialist for treatment, you will wait no more than 16 weeks.
*By the end of 2005, if you are referred urgently to hospital by your GP for investigation and then found to have cancer, you should not have to wait for more than two months for the treatment to start.
*If investigation has shown that you have breast cancer, you should start the treatment within one month of doctors telling you that you have cancer.
*If you are referred urgently to hospital by your GP for investigation and then found to have acute leukaemia, you should not have to wait for more than one month for the treatment to start.
*If your child is referred urgently to hospital by your GP for investigation and is then found to have cancer, treatment should start within one month.
Sometimes, hospital services in your local area might be so busy that it will not be possible for you to get an appointment, a test or treatment within the national target times. If this is the case, you will be given the opportunity to travel to somewhere else in Scotland to get the appointment, test or treatment within the target time. If you want to find out about this, speak to a member of NHS staff involved in your care.
Read the entire pamphlet by pressing the "More" link below.
Note: This pamphlet describes the standards the NHS sets for itself. It may not necessarily describe what the NHS actually is like. More...
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PricewaterhouseCoopers: Big Pharma to Consolidate
As pressures on the pharmaceutical industry increase, global consolidation will continue, according to predictions in the latest Pharma Insights report from PricewaterhouseCoopers, according to a news release.
The lack of research and development (R&D;) productivity, patent expiries, generic competition and high profile product recalls are driving the current level of mergers and acquisition (M&A;) activity in the sector. The report, published annually by PricewaterhouseCoopers Corporate Finance, predicts the following impact of these pressures:
* Further big pharma companies divesting non-core divisions such as OTC
* Continuing consolidation in the Asia Pacific region
* The creation, by consolidation, of new 'big biotech' companies
* One or two deals furthering mid-tier consolidation in the European pharmaceutical sector
The Asia Pacific prediction builds on figures from 2004, which revealed that, for the first time, the number of deals in Asia Pacific (278) exceeded those in North America (252). The value of the Asia Pacific deals was also materially larger than in prior years, dominated by the $7.9 billion merger of Yamanouchi and Fujisawa in Japan.
In contrast to the pharma sector, the biotech sector is going through a period of relative calm from an M&A; perspective. This is, in part, due to the number of biotech companies that have set their sights on an Initial Public Offering (IPO). Most of the significant recent acquisitions in the sector have been led not by pharma companies, but by emerging 'big biotech' companies.
There is still a small window of opportunity for pharmaceutical and biotechnology flotations, although investors are undoubtedly more cautious than they were when the IPO window was last open in 2000. Pharma Insights predicts that investors are now looking for companies with diversified product portfolios and established revenue streams.
There are rumoured to be in excess of 200 biotech companies working towards IPOs in the near future, although the number that succeed will be considerably less. As IPO aspirations fail and cash piles start to dry up, the sector's M&A; imperative will strengthen.
Closely allied to the pharma sector is the medical devices sector, and here too the M&A; market remains active. Last year the value of deals announced in the sector was $46 billion, compared to only $25 billion in the previous year. Future outlook for M&A; activity in medical devices includes:
* The large global players at the high tech end (for example in the cardiovascular and orthopaedic sectors) will continue to acquire smaller local companies that are successful in developing exciting new in-fill technologies
* At the lower tech end (for example in the woundcare and surgical supplies sectors) there will be further consolidation (sometimes private equity-backed) to create mid-market companies capable of competing on a regional basis
* In other segments, such as the dental market, there will be changes in value chain dynamics � driven by factors such as technological innovation and political changes in national supply chain models � that give rise to deal opportunities
Neal Ransome, European Pharmaceutical Sector leader, PricewaterhouseCoopers Corporate Finance, said:
"We are expecting a healthy level of M&A; activity to continue in the next 12 months, particularly as consolidation in Europe and Asia remains high on the agenda.
"It is positive to see a good flow of fundraising in the sector, with 2004 witnessing the highest level of funds raised since 2000. However, the IPO windows of the world will not remain open indefinitely and as they start to close we expect to see an increasing number of biotech companies become available for acquisition."
To request a copy of Pharmaceutical Insights contact Kristina Blissett at [email protected]
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NYT: Lax State Enforcement Permits Medicaid Fraud
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Health Insurers Pressure Doctors to Prescribe Generic Drugs
Apparently to counter mass marketing campaigns by drug companies encouraging patients to obtain high cost prescription drugs, insurers are now pressuring doctors to prescribe, instead, low cost generics, according to the Detroit News.
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Survey: Half of Nurses Plan to Leave Their Current Position in the Next Two Years
In the face of a growing nurse shortage, hospitals and healthcare organizations may need to prescribe new treatments for employee retention. Forty-nine percent of nurses say they plan to leave their current jobs in the next two years, according to the latest survey from CareerBuilder.com, the nation�s largest online job site with more than 20 million unique visitors and over 1 million jobs. Thirty-two percent expect to change jobs in a year and 18 percent plan to do so in as early as the next six months. The CareerBuilder.com survey, "Nurses and Job Satisfaction 2005" was conducted from June 24 to June 29, 2005.
The top reason why nurses say they are seeking out new employers is an unmanageable workload. Nearly three-fourths of nurses report their facilities are understaffed, contributing to high stress levels, compromised patient care, department overcrowding and closing of beds. Sixty-seven percent say their workloads have increased over the last six months and 59 percent say they are feeling burnout.
"The U.S. Department of Labor is projecting there will be a need for 1 million new and replacement nurses by 2012," said Matt Ferguson, CEO of CareerBuilder.com. "However, more than 30 states are already experiencing a shortage of nurses, especially in areas requiring highly specialized skill sets and the ability to lead multi-disciplinary teams. In order to attract qualified nurses and keep them, hospitals and healthcare organizations need to be cognizant of what nurses consider to be essential in cultivating a positive work experience."
When asked to identify the type of healthcare facility they would most want to work for, nearly one-in-four nurses selected doctors� offices. Hospitals came in second as the most ideal employer followed by clinics and pharmaceutical sales companies.
The most important attributes nurses say potential employers need to advertise about themselves to get them to apply for an open position include:
# Competitive salary and benefits
# Flexible schedules
# Stability and profitability
# Demonstrated recognition of employees
# Programs for a healthy work/life balance
*comScore Media Metrix, March 2005. The CareerBuilder Network is a custom aggregation of CareerBuilder.com traffic as well as job search traffic to career centers CareerBuilder powers for partner sites such as Tribune Company, Gannett, Knight Ridder and others.
The new CareerBuilder.com survey, "Nurses and Job Satisfaction 2005," was conducted from June 24 to June 29, 2005. Methodology used to collect survey responses totaling more than 130 nurses for this study involved selecting a random sample of comScore Networks panel members. These Web Panel members were approached via an e-mail invitation, which asked them to participate in a short online survey. The results of this survey are statistically accurate to within +/- 8.59 percentage points (19 times out of 20).
CareerBuilder.com is the nation�s largest online job network with more than 20 million unique visitors and over 1 million jobs. Owned by Gannett Co., Inc. (NYSE:GCI), Tribune Company (NYSE:TRB), and Knight Ridder, Inc. (NYSE:KRI), the company offers a vast online and print network to help job seekers connect with employers. CareerBuilder.com powers the career centers for more than 550 partners that reach national, local, industry and niche audiences. These include more than 165 newspapers and leading portals such as America Online and MSN. More than 30,000 of the nation's top employers take advantage of CareerBuilder.com's easy job postings, 11 million-plus resumes, Diversity Channel and more. Millions of job seekers visit the site every month to search for opportunities by industry, location, company and job type, sign up for automatic email job alerts, and get advice on job hunting and career management. For more information about CareerBuilder.com products and services, visit http://www.careerbuilder.com
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Move Over Canada: Illinois To Import Drugs from Australia and New Zealand
Illinois Governor Rod R. Blagojevich, Wisconsin Governor Jim Doyle, and U.S. Rep. Rahm Emanuel (D-Chicago) today announced plans to expand the I-SaveRx prescription drug importation network to Australia and New Zealand. The expansion comes on the heels of a comprehensive study conducted by Illinois� Prescription Drug Advocates into the safety and savings of prescription drugs in Australia and New Zealand. The advocates� report, released today, shows that the pharmaceutical systems in the two countries are safe and could provide significant savings averaging around 51 percent compared to prices in the United States, which is even better than the savings available from Canada where the same medications cost 32 percent less than in the U.S.
As recently reported, Canada is considering banning the bulk export of drugs.
"The I-SaveRx program is growing and building as more people find out that they can get the medications they need at prices they can afford from state-inspected pharmacies outside the United States. But as we build momentum, the drug companies and their allies are turning up the heat in Canada, which has been the primary point of purchase for millions of Americans. And unfortunately, as we saw just a few weeks ago, their tactics are having an impact there and the Canadian government is considering new restrictions on prescription drug exports. We�ve known for some time that a sound importation program can�t rely solely on Canada. That�s why we originally included the United Kingdom and Ireland, and why today we�re also announcing plans to include Australia and New Zealand. We�ll keep working to ensure that people who are struggling to afford the medicine their doctors say they need have a safe option through I-SaveRx," said Blagojevich.
Beginning in the fall of 2005, I-SaveRx participants will have even more access to significant savings on some of the most common medications used to treat chronic conditions. A comparison of prices for 78 of the most-used prescription drugs in the I-SaveRx program found that prices in Australia are 51 percent less expensive on average than in the U.S, while the same medications from Canada are 32 percent less than in the U.S.
"This expansion of the highly successful I-SaveRx program will help even more citizens afford their prescription medications," Governor Doyle said. "This program helps give our citizens another safe, affordable option for their prescription medications at a time when the federal government has repeatedly refused to fight the drug companies."
"By expanding the I-SaveRx program to include Australia and New Zealand, we are giving Illinois families additional access to affordable prescription drugs at significantly lower prices," said Congressman Emanuel. "Importation is a safe and effective way to help save consumers and taxpayers from the rising costs of prescription drugs and I commend Governor Blagojevich on his efforts."
Following the same strict standards and procedures used to study Canada, Ireland, and the United Kingdom in 2003 and 2004, a team of experts from three State of Illinois departments traveled to Australia and New Zealand in February 2005 to meet with government officials, wholesalers, and pharmacists to determine if the I-SaveRx program could be safely expanded to those countries. The experts examined pharmaceutical manufacturing, warehousing, storage, and dispensing practices and compared them with those in the United States. They also closely reviewed the regulation and management of pharmacies and pharmacists, and conducted on-site inspections of several pharmacies in both countries.
The research team concluded that pharmaceuticals purchased from approved facilities in Australia and New Zealand are safe, effective, and more affordable than pharmaceuticals purchased in the United States. Safety standards in these countries met or exceeded those required by the State of Illinois. The Australian authorities and pharmacy regulators had no concerns with Australian pharmacies filling prescriptions under the I-SaveRx program. In New Zealand, however, the law is unclear about a physician�s ability to re-write a prescription for a patient he or she has not examined in-person. As a result, only prescription medications that are available over-the-counter (OTC) in New Zealand will be made available through the I-SaveRx program. Approximately 25 to 30 medications that are available by prescription in the U.S. can be purchased over the counter in New Zealand, including popular medications like Flonase, Clarinex and Atrovent.
Gov. Blagojevich launched I-SaveRx on October 4, 2004, with Gov. Jim Doyle of Wisconsin. Since then, Missouri, Kansas and Vermont have joined the program. The program is available to all residents of participating states, regardless of age or income. More than 10,300 orders have been filled so far with average savings of 25 to 50 percent.
The I-SaveRx program was the first to establish a network of pharmacies that includes facilities across the Atlantic � and now across the Pacific as well. The I-SaveRx program has extensive safeguards built-in and includes thorough oversight of network pharmacies.
The new program connects users to the I-SaveRx administrative clearinghouse through the website or toll-free telephone number. The clearinghouse provides users with information on the list of medications included in the program, prices in each of the countries and enrollment forms and guidance. Consumers can enjoy one-stop shopping rather than contacting numerous pharmacies to gather information and compare prices.
Before ordering, new enrollees must mail or have their doctor fax a completed health profile form and signed prescription to the clearinghouse. Once the clearinghouse has received the prescription and health profile form, it conducts an initial scan for appropriateness using the same drug interaction software used in Illinois pharmacies. If the prescription passes the interaction test, it is then turned over to a network physician in the country from which the medication will be dispensed, who reviews and re-writes the prescription for a local network pharmacy. The pharmacy performs a final safety check to comply with local laws and regulations before dispensing the medication.
The I-SaveRx import program builds-in numerous safety measures to ensure the quality and safety of drugs dispensed. The list of available drugs is limited to those that are used for long periods of time, and that cannot spoil during the shipping process. Consumers can order eligible drugs for re-fill only, so patients and their doctors have had time to review for unanticipated side-effects or interactions. All network pharmacies agree to comply with Illinois pharmaceutical standards, and to only dispense drugs that are intended as domestic product in Canada, Ireland, the U.K., Australia or New Zealand � meaning the pharmacies cannot dispense prescription drugs from other countries that are not part of the program to I-SaveRx consumers.
For more information about I-SaveRx or to get enrollment information, visit www.I-Saverx.net or call toll-free 866-ISAVE-33.
The full Australian-New Zealand report can be viewed at www.I-Saverx.net.
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Mon Jul 18, 2005
Report: British NHS Good but Could be Better
The British Commission for Healthcare Audit and Inspection, known as the Healthcare Commission, today told the British NHS, it must do more to help people with the greatest need for healthcare. In its first report into the state of British healthcare the independent inspectorate said there are many positive indicators that healthcare provided by the NHS is improving. But it also said the pace of the improvement is not enough for the people who need help most.
Examples of improvement include patients typically waiting less time for treatment in hospital and GP surgeries, falling mortality rates from cancer and many more hospitals having dedicated units for stroke patients, which can greatly improve their chances of recovery. However, the report also found wide variations in healthcare and health between different parts of the country and different groups of the population. For instance, the death rate from cancer is 60% higher in Liverpool than in east Dorset and long term illness or disability is more common among people with lower incomes.
The State of Healthcare Report 2004 examines many aspects of the NHS� provision of healthcare, including care in hospitals and in the community, public health, mental health, care of children and of the elderly.
Sir Ian Kennedy, Chairman of the Healthcare Commission said: �The NHS is highly complex, ranging from GPs� surgeries to intensive care units and from clinics treating those with drug addiction to care for those who need mental healthcare. Some parts of the system are performing better than others.
�It also serves a huge range of people, from pregnant mothers to newborn babies, the chronically ill, those with acute illnesses and those at the end of their lives. It must serve the whole nation, not just those who live in certain areas, or those best able to demand healthcare of good quality.
�My concern, and that of the Healthcare Commission, is that those most in need may still be getting the worst deal.�
The Healthcare Commission today pledged to put inequalities in healthcare and health at the top of its agenda. The Commission will be vigilant in checking that every citizen receives healthcare according to their needs regardless of their circumstances and background. Part of its future work will be dedicated to ensuring that the NHS identifies why the experience of healthcare varies and what it intends to do to address the clear inconsistencies in the provision of services. For example, it appears that a disproportionately high proportion of those compulsorily admitted to mental health units are from black and minority ethnic groups, and the proportion of older people in the population receiving flu vaccinations varies from 49% to 78% across England.
The Healthcare Commission also found variations between England and Wales. For instance, patients are more likely to wait longer for hospital appointments in Wales than in England. In March 2004, fewer than 50 people were waiting more than nine months for an operation in England. In Wales at the end of the same month, 8,457 patients had been waiting longer than 12 months, of which 1,401 had been waiting longer than 18 months.
The Government�s spending on healthcare is increasing. However, the Healthcare Commission is concerned about how those funds are allocated across the country. On historical grounds, some communities receive more money than others. The Government has a formula to address anomalies and to determine how much each community should get, based on the needs of its population, including age, deprivation and amount of ill-health. But many deprived communities, who have the greatest health needs, are not getting as much as they should according to the formula. For instance, Easington in County Durham should be receiving an additional �26.5 million a year while Kensington and Chelsea is receiving �30.3 million a year more than the formula requires.
Sir Ian Kennedy said: �We recognise the Government has a system that, by 2010, will move communities away from their historical funding towards the funding that they should receive. Eventually, more money will go to the communities that most need it. However, 2010 is far away and the Healthcare Commission would like to see more money going to those who need it, more urgently. We believe this is important if the Government is going to achieve its targets for health and healthcare.�
Sir Ian Kennedy also said that solving inequalities in healthcare will also require action to improve the health of people in those communities. This will require partnership between local authorities, schools, healthcare organizations and others. The Healthcare Commission will work with the Audit Commission and other bodies to ensure that all those concerned work towards improving the health of the population.
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"Capitation" for Dummies
Capitation - paying a doctor a fixed annual fee for each patient he services - provides doctors with incentives to minimize the care they give each.
The Marin Independent Journal explains how capitation constrains medical services.
Economist Arnold Kling provides an overview of various payment structures open to doctors.
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Panel: Poor Communication, Bad Information Impede Hispanic Health Care
Poor communications and bad information impede Hispanic healthcare, according to a panel of medical experts speaking Saturday at a Hispanic national conference being held in Philadelphia, according to the Cherry Hill (NJ) Courier Post.
Hamilton, OH, has also reported that language and cultural barriers impede Hispanic healthcare.
However, other reports suggest that immigrants, generally, suffer poor healthcare for economic reasons.
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"Fee for Service" for Dummies
The traditional American "fee-for-service" payment structure - which pays doctors for each service they perform - provides incentives for doctors to order numerous and expensive services.
The Malaysia Star provides an overview about how these incentives can cause excessive and unnecessary diagnostic imaging tests.
Economist Arnold Kling has given an overview of various payment structures doctors might receive.
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Health Plan Strategies for Pharmacy Benefits
Atlantic Information Services, Inc, publisher of Managed Care Week, Drug Benefit News and Specialty Pharmacy News announces the availability of its newest resource, Health Plan Strategies for Pharmacy Benefits. This sourcebook gives you strategies and advice on developing, purchasing and administering pharmacy benefit plans - including data and analysis from five years of quarterly surveys of the PBM industry. For more information visit AISHealth.com
As outpatient prescription drug spending continues its upward spiral, debate over Medicare and Medicaid prescription pharmacy programs persists and the specialty pharmacy industry evolves, payers and PBMs are feeling more pressure than ever to control drug costs. Payers and PBMs are responding with creative new strategies -- including some simple ideas that can have immediate impact.
In this all-new book, you'll learn the latest thinking on the best ways to:
* Provide a pharmacy benefit to diverse populations
* Take advantage of market shifts due to OTC and generic launches
* Maintain member satisfaction
* Control costs in specific therapeutic categories
* Measure the impact of existing pharmacy management programs
* Forecast pharmacy benefit costs in a rapidly evolving field
This publication provides "how-to" advice on developing, purchasing and administering pharmacy benefit plans. Among its wealth of resources, you'll find:
* A PBM vendor shopping guide, featuring detailed, comparative information on pharmacy benefit management companies and other companies that provide services related to the pharmacy benefit. Plus, get up-to-date information on the number of covered lives, number of prescriptions filled, drug expenditures and program initiatives.
* Objective analysis of the methods used in pharmacy plans to control health plan costs -- from therapeutic/generic/OTC substitutions to copay structures to step therapy, prior authorization, reference pricing and dose optimization -- with anecdotal information and consensus on the effectiveness of each.
* Hard data and results of strategies to increase mail-order fulfillment and generic drug dispensing and leverage OTC product switches.
* New information on multi-tiered copay benefit structures, and how they are working for payers.
* Market share data and cost trends developed from our quarterly survey of PBMs.
* Benchmarking data and formulas for evaluating the cost-effectiveness of your pharmacy benefit strategies.
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NYT: Massive Fraud Plauges New York State's Medicaid Program
According to the New York Times, "New York's Medicaid program, once a beacon of the Great Society era, has become so huge, so complex and so lightly policed that it is easily exploited. Though the program is a vital resource for 4.2 million poor people who rely on it for their health care, a yearlong investigation by The Times found that the program has been misspending billions of dollars annually because of fraud, waste and profiteering."
Comment: The Times states that it was able to uncover this fraud through routine computer analysis of the state's Medicaid data. Although a renowned newspaper, The Times nevertheless is not a storehouse of esoteric medical expertise. Therefore, complex as the state's Medicaid program may be, its discoveries apparently should have been available to state regulators as well. The article does not explain how or why the state apparently has been unable to uncover the same fraud through the same data.
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Idaho Access to Health Insurance Program Begins
Idaho's Access to Health Insurance program began July 1. Under it, small businesses must pay half of their employees' premiums and then the state adds up to $100 each for the employee and his or her spouse. The employee pays the rest. Employees' children can also be covered.
IdahoStateman.com details this program.
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Kansas Bioscience Initiative Advances
The Kansas Bioscience Inititative, a state project intended to boost Kansas' economy by promoting bioscience research, should have its final plan ready by this year's end, according to the Wichita Eagle.
Apparently Kansas, like Tampa Bay and Philadelphia seeks to boost its economy by promoting biological research. However, unlike the other two, its efforts appear to extend beyond cancer research to include other bioscience efforts as well.
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Ontario Produced Nearly 103,000 More Vehicles than Michigan Last Year
Ontario produced 2,701,200 vehicles in 2004 while Michigan produced 2,598,400. Lower health costs due to Canada's health system was a major reason why, according to the Don Mills (Ont.)National Post.
Other factors cited include model changeovers and the relative decline of the Big Three automakers. Ontario also has been promoting the automobile industry, the paper added.
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Fri Jul 15, 2005
Wisconsin Supreme Court Strikes Down Medical Malpractice Liability Caps
The Wisconsin Supreme Court, holiding that it violates the state constitution's equal protection clause, Thursday struck down the state's $350,000 (adjusted for inflation) medical malpractice liability cap.
The majority stated:
The question we must answer is whether there is a conceivable set of facts from which the legislature could conclude that a $350,000 cap on noneconomic damages furthers the state's interest in controlling medical malpractice insurance costs for health care providers, thereby controlling health care costs for the people of the state.
As we have explained previously, a $350,000 cap on noneconomic damages appears, at first blush, to be related to the legislative objective of keeping overall health care costs down. The central theory underlying the cap is that large payouts by insurance companies (because of large judgments and settlements) raise malpractice insurance premiums. Therefore, the theory goes, a limitation on damages means insurance companies pay out less. Because insurance companies are paying out less, they will be able to reduce the premiums they charge health care providers. If insurance premiums decrease, health care providers should be able to charge less, thereby lowering health care costs for patients.
The problem with this logic is that even assuming that a $350,000 cap affects medical malpractice insurance premiums and the Fund's assessments on health care providers, medical malpractice insurance premiums are an exceedingly small portion of overall health care costs.
Overall health care costs in the United States are in excess of $1 trillion annually, and are expected to reach $2 trillion by 2006. The direct cost of medical malpractice insurance is less than one percent of total health care costs. For example, in 1992, doctors paid five to six billion dollars in premiums, while the overall cost of health care nationwide reached $840 billion. This is consistent with the findings of several commentators who conclude that medical malpractice insurance-related costs range from 0.56% to 2% of overall health care costs. The non-partisan Congressional Budget Office recently found that "even large savings in premiums can have only a small direct impact on health care spending��private or governmental��because malpractice costs account for less than 2 percent of that spending."
The figures are similar in Wisconsin. Of every $100 spent on health care in Wisconsin between 1987 and 2002, less than one dollar can be traced to medical malpractice related costs.
Therefore, even if the $350,000 cap on noneconomic damages would reduce medical malpractice insurance premiums, this reduction would have no effect on a consumer's health care costs. Accordingly, there is no objectively reasonable basis to conclude that the $350,000 cap justifies placing such a harsh burden on the most severely injured medical malpractice victims, many of whom are children.
We agree with those courts that have determined that the correlation between caps on noneconomic damages and the reduction of medical malpractice premiums or overall health care costs is at best indirect, weak, and remote.
To ensure quality health care in Wisconsin, the state has to attract and retain health care providers. The availability of health care providers is dependent on the availability of reasonably priced medical malpractice insurance, according to the 1975 legislative findings. The legislature declared that "[t]he cost and the difficulty in obtaining insurance for health care providers discourages and has discouraged young physicians from entering into the practice of medicine in this state . . . ."
Studies indicate that caps on noneconomic damages do not affect doctors' migration. The non-partisan U.S. General Accounting Office concluded that doctors do not appear to leave or enter states to practice based on caps on noneconomic damages in medical malpractice actions. The General Accounting Office found that despite extensive media coverage of physician departures from states, the numbers of physician departures reported were sometimes inaccurate and were actually relatively low. The General Accounting Office further reported that the problems it was able to confirm about shortages of doctors were limited to scattered instances, often in rural locations. The Office found that in most cases, providers identified long-standing factors in addition to malpractice pressures that affected the availability of services.
The conclusions reached by the General Accounting Office are supported by other reports and studies.
The Wisconsin Office of the Commissioner of Insurance's biennial reports on the impact of 1995 Wis. Act 10 examine the Act's impact on the number of health care providers in Wisconsin. The Commissioner's 2003 report shows a slight decrease in the number of providers. The Commissioner's 2005, 2001, and 1999 reports show a slight increase in the number of health care providers. The Commissioner's reports do not attribute either the increases or decreases in the number of health care providers to 1995 Wis. Act 10, much less to the $350,000 noneconomic damages cap.
Based on the available evidence, we cannot conclude that a $350,000 cap on noneconomic damages is rationally related to the objective of ensuring quality health care by creating an environment that health care providers are likely to move into, or less likely to move out of, in Wisconsin. The available evidence indicates that health care providers do not decide to practice in a particular state based on the state's cap on noneconomic damages.
Closely related to concerns about access is the practice of "defensive medicine." Among the legislature's findings were that as a result of medical malpractice actions, "health care providers are often required, for their own protection, to employ extensive diagnostic procedures for their patients, thereby increasing the cost of patient care." Defensive medicine, the argument goes, drives up the cost of health care because health care providers will order expensive and unnecessary tests to ensure that if they have to defend themselves against a claim, they can say they did everything possible for the health of the patient.
There is anecdotal support for the assertion that doctors practice defensive medicine, although an "accurate measurement of the extent of this phenomenon is virtually impossible." The Wisconsin Legislative Council Study Committee bill file contains a number of letters from doctors who assert they have practiced defensive medicine. Similarly, the General Accounting Office recently found anecdotal evidence of the practice of defensive medicine by health care providers.
Three independent, non-partisan governmental agencies have found that defensive medicine cannot be measured accurately and does not contribute significantly to the cost of health care. The General Accounting Office study found that "the overall prevalence and costs of [defensive medicine] have not been reliably measured." Findings about defensive medicine must be based on surveys of health care providers, and thosesurveys typically ask [health care providers] if or how they have practiced defensive medicine but not the extent of such practices. In addition, very few physicians tend to respond to these surveys, raising doubt about how accurately their responses reflect the practices of all [health care providers]. [The results] cannot be generalized more broadly [beyond anecdotal evidence]. Other studies have concluded that defensive medicine does not significantly affect the cost of medicine and "that 'some so-called defensive medicine may be motivated less by liability concerns than by the income it generates for physicians or by the positive (albeit small) benefits to patients . . . . [The Congressional Budget Office] believes that savings from reducing defensive medicine would be very small.'"
The evidence does not suggest that a $350,000 cap on noneconomic damages is rationally related to the objective of ensuring quality health care by preventing doctors from practicing defensive medicine. We agree with the non-partisan Congressional Budget Office's finding that evidence of the effects of defensive medicine was "weak or inconclusive."
The North Dakota Supreme Court, reaching the same result we reach in this case in invalidating North Dakota's cap on medical malpractice economic and noneconomic damages, summarized its holding well, as follows:
At the beginning of this opinion we quoted the preamble of the statute, containing its legislative purposes. These include assurance of availability of competent medical and hospital services at reasonable cost, elimination of the expense involved in nonmeritorious malpractice claims, provision of adequate compensation to patients with meritorious claims, and the encouragement of physicians to enter into practice in North Dakota and remain in such practice so long as they are qualified to do so.
Does the limitation of recovery of seriously damaged or injured victims of medical negligence promote these aims? We hold that it does not and that it violates the Equal Protection Clause of the State Constitution. Certainly the limitation of recovery does not provide adequate compensation to patients with meritorious claims; on the contrary, it does just the opposite for the most seriously injured claimants. It does nothing toward the elimination of nonmeritorious claims. Restrictions on recovery may encourage physicians to enter into practice and remain in practice, but do so only at the expense of claimants with meritorious claims.
The dissent responded:
[T]he majority marshals non-Wisconsin studies and articles to undermine decisions made in and for Wisconsin by our legislature. The use of these studies is selective, not comprehensive, so that non-Wisconsin studies that would support our legislation are played down, overlooked, or disregarded.
...[T]he majority systematically minimizes the importance of facts that support the constitutionality of the legislation. For instance, the majority ignores the fact that certain types of malpractice insurance premiums have actually decreased in Wisconsin, while similar premiums have climbed in other states.
The majority opinion does not allege that noneconomic damage caps do not reduce the cost of health care. Rather, the majority concentrates on the fact that "medical malpractice insurance premiums are an exceedingly small portion of overall health care costs." Majority op., 162. The majority equates small percentages with small costs.
A multitude of studies and statistics belie the majority's conclusion. First, a May 2003 study by the Joint Economic Committee of the United States Congress concluded that medical malpractice reform could produce $12.1 billion to $19.5 billion in annual savings for the federal government, and, by decreasing costs, increase the number of Americans with health insurance coverage by as many as 3.9 million people. Another study estimated that the savings from national reform would be $70 to $126 billion dollars per year.
The Congressional Budget Office has estimated that malpractice reforms, including the imposition of caps on noneconomic damages, would result in a 0.4 percent decrease in the price of health insurance. Nationwide, this would mean that an additional 385,000 Americans could obtain health insurance.
While these figures may represent a small percentage of total health care costs or the total number of Americans, they are not inconsequential. There is no reason to believe that these findings are not also applicable, on a smaller scale, in Wisconsin. The legislature had a rational basis to believe that the imposition of damage caps would reduce overall health care costs and increase the availability of health insurance.
E. The Cap Encourages Providers to Stay in Wisconsin and Reduces the Practice of Defensive Medicine
The majority concludes that the existence of the cap does not encourage providers to stay in Wisconsin, nor does it reduce the practice of defensive medicine. I disagree on both counts.
1. The Cap Encourages Health Care Providers to Remain in Wisconsin
In one term, this court has transformed the medical malpractice climate in this state. In Lagerstrom v. Myrtle Werth Hospital, 2005 WI 124, ___ Wis. 2d ___, ___ N.W.2d ___, the court eviscerated the statute modifying the collateral source rule in medical malpractice actions. In Phelps, the court held that medical residents are not health care providers covered by Chapter 655. And today, the majority delivers its masterstroke��the abolition of the statutory cap on noneconomic damages. The majority dismisses any potential consequences, citing a GAO study's tentative conclusion that, "doctors do not appear to leave or enter states to practice based on caps on noneconomic damages . . . ." Majority op., 168. However, the GAO study included limited data from only five states. The majority claims that these conclusions "are supported by other reports and studies." Majority op., 169. This is simply incorrect.
The majority cites three other "studies." The first is a student-written comment. Far from supporting the majority's mistaken premise, this article relates anecdotal evidence of physician migration from states without a noneconomic damage cap. The majority latches on to the article's recognition that the AMA has not declared Wisconsin a "problem" state, majority op., 169 n.227, but the majority misses the point. Wisconsin is not in a medical malpractice crisis because the legislature has addressed it through tort reform. By undoing the work of the legislature, the majority will drag Wisconsin back into the crisis. It is disingenuous to claim that Wisconsin is not experiencing a physician migration problem and use that as a reason to get rid of the cap, when the cap is one reason that Wisconsin has no migration problem at this time.
Another article cited by the majority cites the GAO study already discussed, as well as several newspaper articles, but adds no independent research to the question.
The third article the majority cites is a policy paper presented to the Illinois State Bar Association and later the Illinois General Assembly. The Illinois legislators obviously were not convinced by the assertions in the study��they enacted a $500,000 cap on noneconomic damages in medical malpractice actions shortly thereafter.
Only one study has comprehensively surveyed this question. In 2003, the U.S. Department of Health & Human Services commissioned a study that evaluated data from 49 states over an extended time period. This study concluded that "States with a cap average 24 more physicians per 100,000 residents than States without a cap. Thus, States with caps have about 12 percent more physicians per capita than States without a cap."
This effect is even more pronounced in Wisconsin. The same study evaluated the supply of physicians in Wisconsin over the years 1970-2000, and found that the physician population increased by 104.5% over that time span. Meanwhile, the average supply in states without caps increased by only 79.1%��a difference of over 25%.
Similarly, in Wisconsin, the Commissioner of Insurance reported increases in the number of physicians in Wisconsin in 2005. This conclusion forces the majority to explain away yet more evidence of the positive effects of the cap; according to the majority, the report is unreliable because the Commissioner did not expressly conclude that the positive effect was the result of the noneconomic damage cap. Once again, the majority doesn't let hard evidence get in the way of its preordained conclusion.
Yet another study, after evaluating substantial statistical data spanning 1980-1998, confirmed that "enacting caps on non-economic damages is an effective way to attract and retain physicians." The study went one step further, establishing that the increased number of physicians translated to increased availability of health care in some regions, statistically reducing infant mortality rates among African-American babies by 67 deaths per 100,000 births.
A small dose of common sense compels the conclusion that doctors would prefer to practice medicine in a favorable legal environment. The quoted surveys confirm this notion. Accordingly, the legislature had a rational basis to conclude that the cap on noneconomic damages would encourage physicians to remain in��or move into��Wisconsin.
2. The Cap Reduces the Practice of Defensive Medicine
The issue of whether doctors are less likely to practice defensive medicine is related to medical migration. Majority op., 172. The majority admits that "an 'accurate measurement of the extent of this phenomenon is virtually impossible,'" then holds this difficulty against the legislature. Id., 173.
The majority cites three studies, all concluding that defensive medicine is difficult to measure because "[f]indings about defensive medicine must be based on surveys of health care providers . . . ." Majority op., 174.
It is true that physician surveys provide ample evidence of the existence of the practice of defensive medicine. However, the majority's assertion that such surveys are the only evidence of the practice is simply not correct. On the contrary, "[a] large body of research has accumulated showing that medical malpractice liability causes doctors to practice defensive medicine." Of course, the majority repudiates or ignores physician surveys attesting to the fact that "more than three out of four (76 percent) doctors report that they practice defensive medicine." However, scientific studies arrive at the same conclusion.
In 1996, a study jointly undertaken by Stanford University and the National Bureau on Economic Research employed mathematical models and statistical research over the years 1984-1990 to study the effect of medical malpractice reform��particularly noneconomic damage caps��on the practice of defensive medicine. Daniel Kessler and Mark McClellan, Do Doctors Practice Defensive Medicine?, 111 Quarterly J. of Econ. 353 (1996). The conclusion: "Our analysis indicates that reforms that directly limit liability��caps on damage awards,[] abolition of punitive damages,[] abolition of mandatory prejudgment interest, and collateral-source-rule reforms[]��reduce hospital expenditures by 5 to 9 percent within three to five years of adoption, with the full effects of reforms requiring several years to appear." Id. at 386. The study further found that
if reforms directly limiting malpractice liability had been applied throughout the United States [between 1984 and 1990] expenditures on cardiac disease would have been around $450 million per year lower for each of the first two years after adoption and close to $600 million per year lower for each of years three through five after adoption, compared with nonadoption of direct reforms.
Id. at 387.
Another recent study concluded that tort reform, including the imposition of damage caps, would result in "between $9.3 billion and $16.7 billion in additional budgetary savings in 2013 from reduced defensive medicine." The Joint Economic Committee estimates that the reduced cost of health insurance resulting from the reduction in defensive medicine practices would contribute to allowing an additional 1.6 million to 2.6 million Americans to afford health insurance.
Similar studies are in accord.
These conclusions, based on statistical analysis, obliterate the majority's vague assertions that the effects of defensive medicine either cannot be measured or do not affect health care costs. Majority op., 174. The legislature unquestionably had a rational basis to conclude that its enactment of the noneconomic damage cap would both keep physicians in Wisconsin and reduce the practice of defensive medicine.
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Thu Jul 14, 2005
Study: Rural Health Care Generally Meets or Beats Urban Care
Comparing the perspectives of rural and urban physicians and patients, an article by Center for Studying Health System Change (HSC) researchers found that access to and quality of medical care generally are equivalent or superior in rural areas compared with urban areas. However, rural residents have greater difficulty obtaining mental health services and generally face greater financial barriers to care.
The study�"Access and Quality: Does Rural America Lag Behind?" by HSC Senior Researcher James Reschovsky, Ph.D., and Andrea Staiti, an HSC health research analyst�used a broad set of indicators from the 2000-01 HSC Community Tracking Study Physician and Household Surveys to compare access to care between rural and urban areas. The two surveys include information on 12,406 physicians and 59,725 individuals, respectively.
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Annals of Emergency Medicine: Fear of Lawsuits Boots Hospital Admissions
A new survey of emergency physicians finds those most concerned about lawsuits are more likely to admit patients with cardiac symptoms and to order more tests. The results will be published by Annals of Emergency Medicine as an early online release July 13 ("Emergency Physicians� Fear of Malpractice In Evaluating Patients With Possible Acute Cardiac Ischemia"), according to an American College of Emergency Physicians press release.
"Our research provides evidence that fear of lawsuits does drive health care providers to unnecessarily admit some patients, which increases health care costs," said David A. Katz, MD, with the University of Iowa Carver College of Medicine in Iowa City.
Of the 7 million people who seek emergency department care for chest pain or other symptoms of acute coronary syndrome, about 50 percent are hospitalized or admitted to chest pain observation units, and the majority of these patients are subsequently shown not to have acute coronary syndrome.
To determine the extent the practice of defensive medicine plays in emergency physicians admitting low-risk cardiac patients, researchers surveyed 33 emergency physicians at two university hospitals to gauge their fear of malpractice lawsuits and their impact on triage and workup patterns for patients with symptoms suggestive of heart disease.
To determine the relationship between emergency physicians� fear of lawsuits and their clinical decisionmaking, researchers ranked emergency physicians based on whether they had low, medium or high fear of malpractice. In addition, they prospectively examined the hospital records of 1,134 patients who sought emergency care for symptoms suggestive of heart disease and were treated by these physicians.
Overall, emergency physicians found to have the most fear of malpractice were less likely to discharge low-risk patients when compared with emergency physicians with the least fear. The "high fear" group also were more likely to admit chest pain patients to an intensive care unit or telemetry bed, and to order chest radiography (often a discretionary test) and a guideline-recommended laboratory test for heart muscle damage (cardiac troponin).
"Physicians respond to the perceived threat of litigation by ordering more referrals and more tests, some of which may be recommended by clinical guidelines and beneficial, but others might be wasteful and harmful," said Dr. Katz. "Our study suggests that interventions to lower emergency physicians� actual and perceived risk of lawsuits could be expected to reduce the practice of defensive medicine and its associated health care costs." Researchers caution that because only a small number of emergency physicians were surveyed, the results may not apply to all emergency physicians.
The research was funded by the Agency for Healthcare Research and Quality and the Robert Wood Johnson Foundation Generalist Physician Faculty Scholars Program, with supplemental support from the University of Wisconsin Department of Medicine.
Annals of Emergency Medicine is the peer-reviewed scientific journal of the American College of Emergency Physicians, a national medical specialty organization with more than 23,000 members. ACEP is committed to improving the quality of emergency care through continuing education, research, and public education.
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Massachusetts: Nurses, Hospitals Square Off
The nursing shortage is causing political controversy between nurses and hospitals in Massachusetts. Massachusetts nurses advocate state legislation mandatory registered nurse-to-patient ratios of 1 to 4 for every shift; while hospitals oppose fixed ratios, favoring training and scholarships for more nurses instead, according to the North Adams (MA) Transcript.
According to the Transcript, while both sides agree that the nursing shortage is a problem, they disagree as to its solution.
Nurses and others favor An Act Ensuring Patient Safety (House Bill 2663), which would mandate registered nurse to patient ratios.
Hospitals favor Act to Promote Safe Patient Care And Support the Nursing Profession (Senate Bill 1260). It would provide for training and scholarships for nurses as well as providing for public reports.
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The First Online Directory for Uninsured and Underinsured New Yorkers has Opened
The first online directory of health and social services specifically for uninsured and under-insured New Yorkers, the Health Information Tool for Empowerment (HITE) has opened.
According to its website, it serves as central clearinghouse of programs and services for uninsured people.
HITE also offers users an eligibility calculator to determine if an individual qualifies for one of these programs.
It appears to be designed more for social workers than for the uninsured themselves.
HITE is currently being pilot-tested in three New York communities. Following an evaluation, it will expand to cover all New York state.
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Wed Jul 13, 2005
Co-Pays Rise for Medical Imaging
Seeking to curb the high cost of advanced medical imaging, such as MRI's, employers and insurers are raising the copayments patients must pay to get these advanced tests, according to the Raleigh News & Observer.
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Vermont Uses Faculty Aid to Help Solve Nursing Shortage
As previously reported, a shortage in nursing faculty is causing a nursing shortage, so Vermont is providing a $10,000 bonus to help nursing faculty repay their student loans, according to the Rutland Herald.
According to the Herald, the nursing profession currently is in a bind.
There is a nursing shortage that can only be cured by more nurses. However, training new nurses requires nursing faculty, who must get advanced degrees. Getting these advanced degrees often requires student loans.
Meanwhile, the continuing nursing shortage has caused nursing salaries to surpass nursing faculty salaries, so it has become a better deal to do than to teach, the paper states.
Vermont's bonus is intended to overcome this bind.
(Note, despite the student loan difficulty the paper cites, applicants for nursing graduate programs abound. Last year, nursing graduate programs turned away 3,000 qualified applicants. )
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Electronic Medical Records and Medical Quality: When it is Good, It is Very, Very Good; But When It is Bad...
Conflicting reports are emerging about how electronic medical records affect medical quality. While a recently released report states that hospitals that have electronic records also have a 7.2 percent lower mortality rate; a computer glitch in Canada recently caused lab results for two thousand patients to get mixed up.
According to the report, the nations� 100 most wired hospitals have a 7.2 percent lower mortality rate than other hospitals. However, the report stated that there may not be a causal link between these hospitals' wired status and their lower mortality rate. (Possibly, perhaps, these hospitals also had better medical staffs or even healthier patients.)
On the other hand, despite the Calgary mix up, the risk to patients is considered low.
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Alberta Begins Privately Paid Health Care. Denies Starting Two-Tier System
Following the June 9 Canadian Supreme Court decision that Quebec cannot prohibit individuals from privately seeking health care, Alberta will permit patients to pay extra for speical hip replacements or for private hospital rooms, according to 940News.
Reportedly, Alberta Premier Ralph Klein denies these changes will lead to a two-tier medical system for Alberta; while Liberal opposition Leader Kevin Taft says it will do just that.
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Tue Jul 12, 2005
Candian Auto Workers, Big Three Square Off
Citing their lower health care costs and higher productivity, Canadian autoworkers are resisting cost-cutting demands made upon them by General Motors, Ford, and Daimler-Chrysler, according to Bloomberg.com.
Canadian labor contract talks will begin next week.
Because of their national healthcare system, Canadian workers' health costs are less than United States' workers. As previously reported soaring health care costs recently caused General Motors to announce it will lay off 25,000 workers.
However, according to Bloomberg.com, despite these lower health costs, overall Canadian labor costs for the Big Three remain higher than American labor costs for Toyota, Honda, and other Asian and European auto makers.
The rising Canadian dollar also makes Canadian labor costs more expensive, it adds.
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Pharmaceutical Launch Budgets Top $200 Million
Potential pharmaceutical blockbusters, on average, spent more than $225 million on marketing between Phase III and their first year on the market, according to a new report from Cutting Edge Information.
The report, �Pharmaceutical Product Commercialization: Phase III to Post-Launch Resource Allocation� analyzes marketing spending and staffing for 16 brands, including six blockbusters and ten smaller drugs.
When companies expect products to make less money, they spend less on their launches. Marketing budgets averaged less than $90 million for drugs slotted for peak annual sales between $500 million and $1 billion. For niche brands treating smaller markets, average commercialization expenditures fell below $50 million.
Study author Eric Bolesh points out that it�s critical to look past average figures to the underlying pressures on each individual drug. �Each brand allocated resources to overcome a unique set of challenges,� Bolesh said. �Sales projections dictate investment, but brand strategies and market realities shape the commercial campaign.�
One relatively inexperienced company, for example, developed a drug that proved very successful in clinical trials. The organization, however, did not have deep pockets to support the drug that way it wanted to � during Phase III, the brand team numbered only ten people and spent a little more than $5 million, both extremely low figures. To make matters worse, the market already contained larger, established drugs.
To overcome these obstacles, the company invested in thought leader development and signed a co-promotion deal with a larger firm. As a result of these moves, the company launched a $30 million advertising effort in the drug�s first year on the market.
The report, available at http://www.PharmaLaunch.com, includes the tools necessary to command higher budgets and greater staff support during product development:
- Detailed phase-by-phase breakdowns of spending and staffing levels for 16 major brands
- In-depth analysis into allocations for thought leader, advertising, branding and market research
- Resource allocation data for blockbuster, mid-level and niche products
- Strategic analyses of brands� answers to competitive, clinical and internal infrastructure challenges
To view a summary of this report, visit http://www.PharmaLaunch.com For more information on this report or to learn about other research being conducted by Cutting Edge Information, contact Eric Bolesh at [email protected] or 919-433-0214.
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NYT Looks at Super-Expensive Cancer Drugs
The New York Times looks at the development of new, highly-expensive, marginally effective cancer drugs.
The article states that the high - reach $100,000 a year - cost of these new drugs may cause medical rationing.
Reportedly, drug companies state that high research and development costs, complex and expensive manufacturing processes and "the value the drugs provide for patients" contribute to how much drugs cost.
However, the article quotes those who assert that these new drugs' prices are unrelated to their manufacturing processes.
The article does not state how much of the research and development costs were publicly funded through government research as opposed to how much were privately funded by the drug companies themselves.
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Higher Prices, Not Defensive Medicine Or Waiting Lists, Explain Why U.S. Health Care Spending Is So High
Higher prices for health services such as prescription drugs, hospital stays and doctor visits -- not malpractice claims or greater access to health care services -- is the major reason why Americans spend far more for health care than citizens in other industrialized countries, according to a new study in the July/August issue of the journal Health Affairs.
"There is a popular misconception that we pay much more for health care in the United States compared to European and other industrialized countries because malpractice claims drive up costs and there are waiting lists in most other countries," says lead author Gerard Anderson, a professor in the Department of Health Policy and Management at the Johns Hopkins Bloomberg School of Public Health.
"But what we found, is that we pay more for health care for the simple reason that prices for health services are significantly higher in the United States than they are elsewhere," says Anderson. "We have less access to most health services and higher costs associated with malpractice insurance have only a marginal effect on overall health spending." he adds.
Anderson and his colleagues looked at health care spending per capita in 2002 for the thirty nations that belong to the Organization for Economic Cooperation and Development (OECD). They found that the U.S. spent $5,267 per capita for health care, $1,821 more than the next-highest spender, Switzerland, and $3,074 or 140 percent more than the median level for all OECD countries.
U.S. health spending accounted for 14.6 percent of U.S. gross domestic product (GDP) in 2002. Only two other countries, Switzerland and Germany, spent more than 10 percent of their GDP on health care that year.
An analysis of costs associated with malpractice claims in the U.S. showed that they explain only a small portion of the difference in health spending. Malpractice awards in the U.S. amounted to only $16 per capita in 2001, compared with $12 in the U.K. and $10 in Australia. Surprisingly, the average award was lower in the U.S. than in Canada and the U.K. In 2001 the average U.S. payment was $265,103 -- 14 percent higher in Canada and 36 percent higher in the U.K.
Costs associated with defensive medicine -- tests or procedures intended to protect physicians from lawsuits -- could account for more of the price differential, the researchers note. But they point out that analysts have had a difficult time singling out services provided solely out of fear of litigation And there is debate on the extent of defensive medicine in the U.S. Perhaps most important, the highest estimate of the cost of defensive medicine is 9 percent, a small fraction of the 140 percent differential in spending with the median OECD country.
The study also finds no evidence that U.S. citizens spend more for health care because they get more services. For example, when one looks at hospital beds, physicians, nurses, magnetic resonance imaging (MRI), and computed tomography (CT) scans available per capita, Americans actually have access to fewer health care resources compared with people in many other countries.
It is true that in some countries people are forced to wait for health services. However, that doesn�t appear to explain price differences, either. The services with waiting lists account for only 3 percent of U.S. health spending. Also, per capita spending in seven OECD countries without waiting lists for health services was about $2,500 less than it was in the U.S.
Health Affairs, published by Project HOPE, is a bimonthly multidisciplinary journal devoted to publishing the leading edge in health policy thought and research. Copies of the July/August 2005 issue will be provided free to interested members of the press. Address inquiries to Jon Gardner at Health Affairs at 301-347-3930 or via e-mail, [email protected] Selected articles from the issue are available free on the journal's Web site, www.healthaffairs.org
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Connecticut AG: Insurers are Gouging Doctors
Citing a recent report that malpractice premiums have soared while payouts have remained constant, Connecticut�s Attorney General Richard Blumenthal on July 7 called for stricter oversight of the malpractice insurance industry, according to a press release from his office.
According to the release:
Blumenthal, in a letter to the [National Association of Insurance Commissioners (NAIC) and state Insurance Commissioner Susan F. Cogswell], said the data raises serious questions about competition among malpractice insurers. He said the report requires immediate and meaningful steps to address potentially pervasive unfair and deceptive practices.
"These numbers tell a powerful story about who should bear the blame for the astounding and alarming medical malpractice insurance costs � the insurers themselves," Blumenthal said. "Insurers are reaping gratuitous surpluses while doctors are fleeing high-risk specialties or closing practices altogether.
"The numbers underscore the need for much tougher, more aggressive oversight to prevent and punish profiteering. Federal and state regulators should thoroughly scrutinize recent rate increases and take appropriate corrective action.
"Affordable medical malpractice insurance is critical to public health. Expensive insurance rates become a matter of life and death when they drive doctors out of business � as is happening in Connecticut and nationwide. Insurance company greed can be hazardous to our health."
Disputing the report Blumenthal relies upon, others have asserted that malpractise payouts have not remained flat but rather have risen.
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Mon Jul 11, 2005
Doctors Dispute Report that Malpractice Payouts Have Remained Level
Doctors dispute a report that malpractice payouts have remained level, according to RedNova.com.
As previously reported, a recent study has asserted that, over the last five years, the amount the major medical malpractice insurers have collected in premiums has more than doubled, while their claims payouts have remained essentially flat.
However, according to Rednova.com, the Physicians Insurance Association of America asserts instead the average jury award increasing from $347,000 to $607,000, or 75 percent. The malpractice awards exceeding $1 million have practically doubled over the period to 7.5 percent.
Comment: The truth is out there, somewhere.
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Minnesota Government Back on Track
The Minnesota state government got back on track Saturday after the governor and the legislature reached a budget agreement, according to the St. Paul Pioneer Press.
As previously reported, the state government shutdown on July 1 because the legislature did not pass a budget the governor would sign. Health care and education expenses factored heavily in this dispute.
According to the Pioneer Press, the state�s health and welfare costs will be held to a 15 rather than 19 percent increase over the next two years. Also, the $5,000 outpatient expenses cap on the MinnesotaCare, the state's Medicaid program, will be repealed and the state will not restrict MinnesotaCare's eligibility requirements.
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Sun Jul 10, 2005
NYT: Solo Insurance is Possible But Not Easy
The New York Times describes the troubles people seeking solo health insurance have.
Comment: Had they published this article fifteen years ago, it might have been newsworthy.
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Sat Jul 09, 2005
United Health Care, Indian Hospital Group Propose Joint Venture
United Health Care and Indian-based Apollo Hospitals Group are proposing jointly setting up stand-alone health insurance companies in India, according to the Sify - Taramani,Chennai,India.
United Health, a leading US-based medical insurer, has recently been in the news for its proposed takeover of PacifiCare Health Systems.
Apollo Hospitals is the single largest private hospital group in Asia today.
Apparently, the United Health / Apollo deal directly involves United's providing insurance services to Indians and not Apollo's providing health services to Americans.
However, Apollo is keenly involved in "medical tourism," the transport of Americans and other Westerners to Asia where medical expenses are a fraction of those charged in the United States. According to Apollo CEO, Dr Prathap C. Reddy, Apollo charges $3,000 to $4,000 for heart surgery that would cost at least $60,000 in the United States.
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Fri Jul 08, 2005
New Bill: Drug Companies Should Disclose All Drug Trial Information
Representatives Henry A. Waxman (D-CA) and Edward J. Markey (DMA),
two senior members of the Energy and Commerce Committee, along with 30 other members of the House announced on June 30 the introduction of the Fair Access to Clinical Trials (FACT) Act (H.R. 3196). This legislation will ensure that patients, clinicians, and the public have access to basic clinical trial information about drugs, biologics, and medical devices.
Recent news reports have indicated that some pharmaceutical companies are not releasing clinical trial information that raises concerns about their drugs or devices. The lack of mandated full disclosure allows companies to paint a distorted picture of the safety and effectiveness of drugs and medical devices by selectively disclosing trial information.
�We cannot continue to allow companies to promote only the positive results of clinical studies and suppress the negative results,� Rep. Waxman said. �The present system can seriously mislead physicians and pose safety hazards for patients. The Fair Access to Clinical Trials Act creates a publicly accessible clinical trials database and requires that study sponsors use it.�
�Drug companies should not be able to pick and choose which trials they want to disclose and which they want to hide from the public,� said Rep. Markey. �The medical community deserves to have a complete picture of the safety and effectiveness of drugs and devices.�
The �Fair Access to Clinical Trials Act� would establish a mandatory federal clinical trials database. This legislation would:
- Require sponsors of privately and publicly funded studies of drugs, biologics, or medical devices to register using a database that builds on the National Library of Medicine�s www.clinicaltrials.gov;
- Provide public access to basic information on studies before they begin, such as the disease or condition with which the trial is concerned, the hypothesis being tested, the sponsor and principal investigator, and the sources of funding;
- Provide public access to the results of clinical studies, including primary and secondary outcomes and significant adverse events; and
- Authorize the Secretary of HHS to impose penalties for noncompliance, including revoking a sponsor�s eligibility for further federal funding and imposing civil money penalties.
For more information or a bill summary, please visit: http://www.waxman.house.gov or http://www.house.gov/markey/healthgen.htm
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Legislation Intended to Ease Nursing Shortage Introduced
Rep. Carolyn McCarthy (D-NY) introduced the Nurse Faculty Higher Education Act on June 30. The legislation seeks to alleviate the nursing shortage by creating a pilot program to increase the number of graduate educated nurse faculty, according to a press release from her office.
�America�s nursing shortage, in part, stems from the lack of qualified instructors in our nursing schools,� said McCarthy. �My legislation will provide scholarships to nurses who seek advanced degrees in order to become faculty in an accredited nursing program.�
McCarthy, who worked as a nurse for more than 30 years before being elected to Congress, cited a 2004 survey by the American Association of the College of Nursing revealing that U.S. nursing schools had to turn away 32,000 qualified applicants. Many of these schools rejected applicants simply because of an insufficient number of available faculty.
In addition, 200 to 300 doctoral level nursing faculty will be eligible for retirement within seven years, just as more than one million new nurses will be needed.
�The nursing shortage must be addressed now, or it will become a full fledged public health crisis,� said McCarthy.
McCarthy�s bill will also provide grants to hospitals and health facilities to support institutions permitting qualified nurses to earn a salary while they continue their education. Nurses participating in this program would continue to work part-time or flexible schedules to accommodate their schooling.
Upon completion of the program, each nurse will be required to teach two years for each year of support received under the program.
The Nurse Faculty Higher Education Act is supported by the American Association of Colleges of Nursing, the American Organization of Nurse Executives, the American Nurses Association, the National League for Nursing, the Emergency Nurses Association, the American Hospital Association, the Federation of American Hospitals and the United American Nurses.
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Thu Jul 07, 2005
Drug Companies Lobbying Dollars at Work
The pharmaceutical and health products industry has spent more than $800 million in federal lobbying and campaign donations at the federal and state levels in the past seven years, a Center for Public Integrity investigation has found.
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Seeking Well-Insured Patients, Hospitals Go To Wealthy Indianapolis Suburbs
The building boom that spawned four new heart facilities in Indianapolis two years ago has continued unabated, raising concerns about higher health care costs in an already high-cost market, according to a new Community Report released on June 7 by the Center for Studying Health System Change (HSC).
Much of the building boom is taking place in growing suburban areas of Indianapolis, where hospitals are intensifying competition for profitable, privately insured patients who are moving to the suburbs.
"This recent wave of hospital expansions threatens to erode the geographic segmentation that has kept the four major hospital systems on relatively friendly terms," said Paul B. Ginsburg, Ph.D., president of HSC, a nonpartisan policy research organization funded principally by The Robert Wood Johnson Foundation.
As previously reported, hospital building booms are also taking place in Milwaukee and Cincinnati.
Despite the increased competitive environment, Indianapolis providers are working together on community-wide clinical data-sharing initiatives designed to improve the quality and efficiency of care delivery. These initiatives place Indianapolis far ahead of most other communities in the use of information technology.
Other key findings of the report, Continued Hospital Expansions Raise Cost Concerns in Indianapolis, which is available < a href="http://www.hschange.org/CONTENT/749/">online include:
- National health plans have expanded their market share at the expense of some local plans and third-party administrators.
- An employer consortium is pushing for provider performance reporting and new insurance products that reward quality and efficiency.
- Reforms at the county hospital alleviated financial difficulties and prompted changes in the local safety net.
Indianapolis is one of 12 communities across the country tracked intensively by HSC researchers through site visits. The new report is based on a January 2005 site visit and interviews with more than 95 Indianapolis health care leaders, representing health plans, employers, hospitals, physicians and policy makers.
The Center for Studying Health System Change is a nonpartisan policy research organization committed to providing objective and timely research on the nation's changing health system to help inform policy makers and contribute to better health care policy. HSC, based in Washington, D.C., is funded principally by The Robert Wood Johnson Foundation and is affiliated with Mathematica Policy Research, Inc.
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Study: Malpractice Premiums Soar While Payouts Remain Flat
Over the last five years, the amount the major medical malpractice insurers have collected in premiums has more than doubled, while their claims payouts have remained essentially flat, according study entitled "Falling Claims and Rising Premiums in the Medical Malpractice Insurance Industry." released on June 7.
The Center for Justice & Democracy commissioned the report while the Alliance for Justice, Center for Justice & Democracy, Consumer Federation of America, Public Citizen, USAction, and U.S. PIRG released it.
According to a press release, "Falling Claims and Rising Premiums in the Medical Malpractice Insurance Industry�s" conclusions are based upon an examination, for the first time, of statements supplied under oath to state insurance departments by the nation�s top medical malpractice insurers. The study reveals that the insurance industry has been overcharging doctors significantly despite the fact that their claims payments, in real terms, have dropped since 2000. Moreover, contrary to the impression they have given the doctors and the general public, the �losses� that medical malpractice insurers predict they will pay in the future � the insurers� purported basis for current rate hikes - are down as well.
Jay Angoff, author of the study, former State of Missouri Insurance Commissioner, said, �The leading malpractice insurers� Annual Statements indicate that they have been raising their premiums even though both their actual claims payments and their projected future claims payments have been falling. The Annual Statement data thus prove that doctors have been overcharged during the last several years. Those overcharges are obviously bad news for doctors, but they have resulted in good news for investors in the leading pure malpractice insurance stocks, which have doubled during the last three years while the stock market as a whole has remained flat.�
J. Robert Hunter, Director of Insurance for the Consumer Federation of America, which co-released the report, said, �Doctors and consumers deserve to see the facts behind the true crisis, which is that insurance companies are price-gouging their doctors, not an explosion in claims.� Hunter is the former Texas Insurance Commissioner and Federal Insurance Administrator.
"Falling Claims and Rising Premiums in the Medical Malpractice Insurance Industry" analyzes each of the 15 largest AM Best-rated medical malpractice insurers in the United States and is based entirely on data from Annual Statements filed under oath with state insurance departments. It finds:
- Actual payouts. Over the last five years, the amount the major medical malpractice insurers have collected in premiums has more than doubled, while their claims payouts have remained essentially flat. The increase in the premiums collected by these companies was 14 times as great as the increase in their claims payments on a gross basis and 21 times as great as the increase in those payments on a net basis (after reinsurance).
- Incurred Losses. Incurred losses are claims that an insurer projects it will pay in future years on policies in effect in that year. When insurers raise their rates to a much greater extent than their actual claims payments would justify, they argue that the rate increase is necessary because they must increase their reserves to account for what they expect will be higher claims payments in the future. However, the report shows that some malpractice insurers substantially increased their premiums while both their claims payments and their projected future claims payments were decreasing.
- Surplus. Surplus is the extra cushion an insurance company accumulates over and above the amount it has set aside to pay its estimated future claims. Because of the overall surge in malpractice premiums with no corresponding surge in claims payments during the last five years, the leading malpractice insurers have increased their surplus by more than a third in only three years, and they are now charging more for malpractice insurance than either their actual payments in malpractice cases or their estimated future payments in malpractice cases would justify.
The following companies are examined in the report: Lexington Insurance Company; GE Medical Protective Company; The Doctors Company; ISMIE Mutual Insurance Company; Health Care Indemnity, Inc.; Mag Mutual Insurance Company; Medical Assurance Company; ProMutual Group; First Professional Insurance Company; State Volunteer Mutual Insurance Company; Norcal Mutual Insurance Company; ProNational Insurance Company; Continental Casualty Company; American Physicians Capital, Inc.; and Evanston Insurance Co.. Among specific company findings are:
Healthcare Indemnity, Inc. (HCI), an affiliate of HCA corporation, increased its premiums by $173 million, or 88%, while its claims payments fell by $74 million, or 32%. As a result, in 2004 it paid out only 43 cents in claims for each premium dollar it collected.
Lexington Insurance Company, an affiliate of AIG, reported that its net written premiums increased from $21.1 million in 2000 to 483.0 million in 2004�an increase of $461.9 million, or 2200%--while its net paid losses increased by only $52.9 million. As a result, in 2004 it paid out only 14 cents in claims for each premium dollar it collected.
ProNational Insurance Company, an affiliate of ProAssurance Corporation, increased its premiums by $87 million, or 79%, while its claims payments fell by $43 million, or 63%. As a result, in 2004 it paid out only 13 cents in claims for each premium dollar it collected.
Medical Assurance, another ProAssurance affiliate, increased its premiums by $151 million, or 89%, while its claims payments fell by a third. As a result, in 2004 it paid out only 10 cents in claims for each premium dollar it collected. More...
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More Than One in Four Non-elderly Women Delay or Forgo Medical Care
A new national survey of women on their health finds that a substantial percentage of women cannot afford to go to the doctor or get prescriptions filled. Although a majority of women are in good health and satisfied with their health care, many have health problems and do not get adequate levels of preventive care. For those who are sick, poor, or uninsured, the challenges are magnified. The Kaiser Family Foundation report, Women and Health Care: A National Profile, is based on a national survey of 2,766 women age 18 and older.
As health care costs grow, more than one-quarter of non-elderly women (27%) and two-thirds of uninsured women (67%) report they delayed or went without care they believed they needed in the past year because they could not afford it, compared to 24% and 59% respectively in 2001. Among women with private coverage, nearly one in five (17%) delayed or went without care. In addition, 20% of women ages 18 and older say they did not fill a prescription in the past year because of the cost.
�The growth in health care costs has become a central women�s health issue,� said Alina Salganicoff, Vice President and Director of Women�s Health Policy at the Kaiser Family Foundation. �A sizable share of women are falling through the cracks, either because they don�t have insurance or even with insurance can�t afford to pay for medical care or prescription drugs.�
Fewer than half of all women say they have talked to a health care professional in the past three years about smoking (33%), alcohol use (20%), and calcium intake (43%), while just over half have talked about diet, exercise, and nutrition (55%). Among women of reproductive age (18-44), fewer than one in three (31%) say that they have talked with their doctor about their sexual history and specific issues, such as STDs (28%) and HIV/AIDS (31%) in the past three years.
Mammography rates reported by women ages 40 to 64 have not improved, falling slightly from 73% in 2001 to 69% in 2004. Only 40% of uninsured women over 40 had a mammogram in the past year, compared to three-quarters of women with private coverage (74%) or Medicare (73%). Pap testing rates reported among women ages 18 to 64 also fell from 81% in 2001 to 76%. Only 38% of women 50 and older say they have had a colon cancer screening test in the past two years and 37% of women 45 and older say they received a test for osteoporosis in the past two years.
Additional key findings:
Prescription Drug Costs
* Women (56%) are more likely than men (42%) to use a prescription medicine on a regular basis, and are also more likely to report difficulties affording their medications.
* 41% of uninsured women say they did not fill a prescription due to costs, as do one in six women (17%) with private coverage and nearly one in five women with Medicaid (19%) .
* One in seven (14%) women also report that they skipped or took smaller doses of their medicines in the past year to make them last longer.
Chronic Health Conditions and Mental Health
* Nearly four in 10 women (38%), have a chronic condition, such as diabetes, asthma or hypertension that requires ongoing medical attention, compared to 30% of men.
* One in four women (23%) reported they have been diagnosed with depression or anxiety, over twice the rate for men (11%).
Access and Quality of Care Among Women in Fair or Poor Health
* Over one-third (37%) of women in fair or poor health say that they delayed or went without medical care in the past year due to costs, and one-third (34%) did not fill a prescription because they couldn�t afford it.
* Nearly one-third (31%) of women in fair/poor health report concerns about the quality of care they received in the past year, compared to 18% of women in better health.
Women as Caregivers and Family Decision Makers
* One in 10 women (12%) care for a sick or aging relative. Among this group, forty percent are low-income, 46% have a chronic health condition of their own, and 29% provide more than 40 hours of care per week. One in five (20%) non-elderly caregivers are uninsured.
* Eight in 10 mothers/guardians say they have lead responsibility for choosing their children�s doctors (79%), taking them to appointments (84%), and ensuring they receive follow-up care (78%).
The report will be released at a briefing today in Washington, D.C. that includes a panel discussion among Alina Salganicoff, Ph.D. Vice President and Director of Women�s Health Policy at Kaiser and report co-author; Carolyn M. Clancy , MD, Director, Agency for Healthcare Research and Quality; Paula A. Johnson , MD, MPH, Executive Director, Connors Center for Women�s Health and Gender Biology, Brigham and Women�s Hospital, and, Susan Starr Sered, PhD, Co-author of Uninsured in America, Life and Death in the Land of Opportunity and Research Director, Religion and Health Initiative, Suffolk University, Boston, MA.
The report and materials from the briefing are available online. An archived webcast of the briefing will be available online after 5:00 p.m. ET on July 7.
The Kaiser Women�s Health Survey is a nationally representative telephone survey of 2,766 women ages 18 and older. The survey was designed and analyzed by Kaiser Foundation staff in collaboration with Princeton Survey Research Associates International (PSRAI) and researchers from University of California, Los Angeles and fielded between July 6 and September 26, 2004. A shorter companion survey of 507 men was also conducted. The margin of sampling error is +/-2 percentage points for women, +/-4 percentage points for men, and is larger for subgroups.
The Kaiser Family Foundation is a non-profit, private operating foundation dedicated to providing information and analysis on health care issues to policymakers, the media, the health care community, and the general public. The Foundation is not associated with Kaiser Permanente or Kaiser Industries.
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New Hampshire: New Law Repeals the Use of Geography and Health Status as Factors in Determining Health Insurance Rates and Establishes a Reinsurance Pool for High-Risk Patients.
New Hampshire Governor John Lynch Tuesday signed SB 125, which bars insurers from using geography and health status to set rates and also which creates a reinsurance pool.
"Today, we are ending the ability of health insurance companies to discriminate against sick workers, or to dramatically increase rates on small businesses just because they are located in the North Country or the Seacoast," Lynch said.
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CDC Report: Number of Uninsured Children Declines, of Adults Remains Steady
Health insurance coverage for children showed continued improvement in 2004, and the percentage of working-age adults without insurance coverage, which had been climbing in recent years, did not increase last year, according to a new report from the Centers for Disease Control and Prevention (CDC).
The data, based on CDC�s National Health Interview Survey, provides estimates of insurance coverage for the United States in 2004. For the first time, the latest survey also includes statistics on insurance coverage for the nation�s 10 largest states.
The report, which tracks insurance coverage since 1997, finds that the improvement in coverage for children reflects an increase in public coverage�including the State Children�s Health Insurance Program--for poor and near-poor children.
Highlights of the report include:
- In 2004, over 90 percent of America�s children had health insurance at the time of the interview � a steady rise from the first report in 1997. In 2004, 9.4 percent of children � 7 million children under 18 years of age � were without health insurance. In contrast, in 1997, about 14 percent � 10 million children � lacked coverage.
- Among poor and near-poor children, lack of coverage dropped by about a third from 1997. For near-poor children, public coverage almost doubled from 24 percent to 43 percent between 1997 and 2004. Nearly 70 percent of poor children under 18 years of age rely on public coverage.
- Overall, 14.6 percent of the population � 42.1 million Americans of all ages � was without current health insurance coverage in 2004, about the same level as in 1997.
- One in five working-age adults (age 18-64) were without insurance in 2004. This number had been steadily rising in recent years but appears to have leveled off in 2004.
The survey produced health insurance coverage estimates for the 10 largest states. For the population under age 65, Michigan, New York, Ohio and Pennsylvania had considerably lower rates of uninsured than the national average of 16 percent. In California and Florida, just over 20 percent were without health coverage, and in Texas, about 27 percent lacked coverage.
These findings appear in �Health Insurance Coverage: Estimates from the National Health Interview Survey, 2004,� gathered from the annual household survey with a sample of the nation�s civilian non-institutionalized population. In 2004, the survey, conducted by CDC�s National Center for Health Statistics, added questions to improve the accuracy of the estimates on insurance coverage.
In addition to insurance coverage, the survey collects data on a wide range of health indicators, including measures of health care utilization, health habits and health status. The findings are on the CDC/NCHS Web site.
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Wed Jul 06, 2005
Dartmouth Report: While We Have Enough Pediatricians, We Need Greater Racial Diversity and Broader Geographic Distribution
A report from the Committee on Pediatric Workforce, authored by David Goodman, M.D. of Dartmouth Medical School, has resulted in a revised policy statement from the American Academy of Pediatrics (AAP), challenging current assumptions about the need for greater numbers of doctors and raising concerns about a continued lack of racial diversity and geographic distribution in the pediatric workforce. The report and new policy statement appear in the July 5 issue of the journal Pediatrics.
"This review provides a timely, focused examination on the future of pediatrics in our country," said Dr. Goodman, who is a professor of pediatrics and of community and family medicine at Dartmouth Medical School, and a pediatrician at Dartmouth-Hitchcock Medical Center. "We saw the need to accompany the new AAP policy statement with a comprehensive report that presents background information and examines emerging trends to reflect our unchanging goal to provide effective healthcare to children." He noted that although the health of elderly populations is the subject of much current media focus, children constitute a quarter of the U.S population and consume an increasing portion of health care services.
In the report, "The Pediatrician Workforce: Current Status and Future Prospects," Goodman and the Committee on Pediatric Workforce describe important recent changes in the pediatrician workforce, which include:
- New majority status of female pediatricians, a historic first for any medical specialty in the U.S.;
- Positive growth in medical students choosing careers in pediatrics, leading to an 18% increase in pediatricians per child in the last decade;
- Increased reliance on international medical graduates, with approximately one third of practicing pediatricians attending medical school outside the U.S. and Canada;
- Limited improvement in the ethnic and racially diversity of pediatricians that is not keeping pace with an increasingly diverse population of U.S. children;
- High geographic variation among pediatricians, leaving some rural and inner-city populations underserved, while other regions have a very high supply.
Addressing what the report calls "fundamental changes that will have important effects on the professional lives of pediatricians and children's health care delivery," the AAP's new policy proposes incentives to enhance the geographic distribution of pediatricians, but does not advocate an increase in the number of medical school graduates or pediatric residency positions.
"Regional disparities represent the most significant challenges to pediatric care and the answer does not lie in adding more pediatricians to the population," said Goodman, a member of the Center for Evaluative Clinical Sciences (www.dartmouth.edu/~cecs/) at Dartmouth Medical School, a consortium of physicians dedicated to improving the quality and value of clinical care. "Supply is not a critical factor in terms of how well healthcare systems take care of patients and how well those patients do in terms of health and well-being."
The new AAP policy guidelines also include strategies to recruit a larger percentage of culturally and racially diverse pediatricians to accommodate the increasing population of minority children. "We really face a crisis of diversity in pediatrics," notes Goodman. "This country is changing very quickly and the cultural roots of providers do make a difference in terms of patient care in a number of ways. If the aim is to improve the health and well-being of patients then it is desirable to have as diverse a workforce as possible."
The Committee on Pediatric Workforce manages issues pertaining to the supply, requirements, demographics, and geographic distribution of general and subspecialty pediatricians. It evaluates major policy and regulatory issues that shape the pediatric workforce, such as the funding of graduate medical education, international medical graduates, the geographic distribution of pediatricians, and changing systems of health care delivery. The COPW formulates the Academy's positions and responses to legislation, federal and regulatory bodies, and other organizations on physician workforce issues.
Download a pdf of the report, "The Pediatrician Workforce: Current Status and Future Prospects" from Pediatrics.
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Radiology Driving Medical Costs
Diagnostic imaging is the fastest growing element in the U.S. health care budget. The Columbus (GA) Ledger-Enquirer takes a look at the benefits as well as the costs involved in this trend.
MRI's and CT-scans can cost more than a $1 million each, the paper reports. This drives up costs.
What the paper does not report however, is that while the machines themselves may be expensive, the doctors needed to interpret the results are not necessarily so. With modern communications, as previously reported, it is quite possible to transmit the images to India, where inexpensive radiologists can examine them.
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Insurers May Not Pay for FDA-Approved Medical Devices
Insurers can and will deny coverage for medical devices even though the FDA has approved them.
The New York Times looks at how - despite FDA approval - insurers deny coverage for Johnson & Johnson's Charit� -- a spinal disk that can be implanted as an alternative to spinal fusion.
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R2D2-Type Robots Deliver Telemedicine
The Washington Post looks at how doctors, via R2D2-type robots, distribute medical care from afar.
While the Post does consider how this televised care depersonalizes care, it does not consider that if expensive American doctors can deliver long distance robot care, then so can inexpensive Indian doctors.
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Tue Jul 05, 2005
L.A. Times: California Hospital Pricing Lists May Not Tell US Much
As previously reported, only about half of California's hospitals have submitted lists of the prices they charge for various items, as state law requires them to do. However, the Los Angeles Times , stating that it is difficult to compare directly different prices charged by different hospitals, questions the value of these lists.
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Medical Refugee Flees America for Mexico
"We stepped into a new reality where everything; prescription drugs, housing, utilities, food, transportation, entertainment, is 25-75% less than it is in America. My Social Security Disability income more than adequately covers our expenses here in Guanajuato, Mexico. An example is that I can buy all my needed prescriptions for less than the co-pay I forked over for one drug in the United States! I get a month of Prozac for less than $16.00 usd. Same drugs, only affordable! Can you believe that?"
This summarizes Fibromyalgia Syndrome patient Doug Bower's account of how the threat of financial ruin forced him to flee the United States for Mexico.
For a fuller description of how and why Bower and others are fleeing the American healthcare system, read his article.
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How the Veterans Health Administration Runs Its Pharmacy
The Veterans Health Administration has automated its pharmacy. Reportedly, this has reduced medical errors, according to Dateline Alabama.
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China offers Lower Cost but Lower Quality Clinical Trials
China is attracting interest as a site for clinical research, according to Nature.com.
Low cost and ease of access to patients are the main incentives for clinical trial outsourcing in China, it states. The cost of a clinical trial for a new drug in China is only half of the amount in the United States or Western Europe owing to lower labor and infrastructure costs.
However, China now suffers from poor data standardization, delays in gaining trial authorization from Western regulators and questionable ethical standards.
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Sun Jul 03, 2005
Australians Also Seek Medical Tourism
Fleeing waiting lists of up to five years, Australians are seeking treatment in India, Dubai, Singapore, Malaysia and Thailand, according to the Queensland Sunday Mail.
According to the paper, despite medical tourism's rapid service and low cost, it has risks: the difficulty of judging quality of service and hospital equipment standards and the lack of post-operative care.
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Sat Jul 02, 2005
Hispanics Have Difficulty Obtaining Healthcare
Hispanics experience difficulty obtaining healthcare, according to the Hamilton (OH) Journal News.
As previously reported, immigrants are more likely to be uninsured than native-born Americans.
Obviously there is a connection between these two situations, but it is unclear whether it is a cultural phenomenon that applies to Hispanics, as the Journal News suggests, or whether it is an economic phenomenon that applies to all immigrants, as the previous report suggests.
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How Much for a Tylenol? Some Hospitals Charge $7 - Others Charge $1 - Others Charge Nothing
Only about half of the California's 420 hospitals have submitted their pricing lists, as required by state law. The deadline for submissions is the end of the day today. The so-called "chargemasters" are significant because they compare the prices of services at different hospitals across the state -- identifying price gouging and huge price swings. For example, according to 2004 chargemaster data, the cost of a single 325 mg Tylenol tablet at Scripps Memorial in La Jolla was $7.06 compared to $1 at UC Davis and $5.50 at San Francisco General. At Doctors hospital in Modesto Tylenol was free, according to a Foundation for Taxpayer and Consumer Rights (FTCR) press release.
The Foundation for Taxpayer and Consumer Rights (FTCR) said that submitting price lists is only the first step -- hospital charges should be standardized with allowances for local differences in business costs so that all all hospitals receive a comparable amount for similar procedures.
"It's absurd that a patient in one part of the state pays $7 for a Tylenol while another gets the pill for free," said Jerry Flanagan of FTCR. "The only way to ensure access to emergency rooms and hospitals is by employing the same model that California once used to protect our electricity costs and still does for water and telephone service: public utility regulation. HMOs and some hospitals are making a killing, while the county system is hemorrhaging."
"Cost shifting" -- the practice of charging uninsured patients more for the same service to compensate for discounts given to patients in HMO plans -- has undermined the health care system and forced many urban hospitals to close. Ultimately, cost shifting costs taxpayers more because the uninsured are forced to wait until illnesses are critical before seeking care in Emergency Rooms where care is much more expensive. Many patients go without necessary care.
AB 1672, authored by Assemblyman Dario Frommer (D-Glendale) and signed into law in 2003, requires California's 420 acute care hospitals to annually submit a copy of its chargemaster and list of charges for 25 services or procedures commonly charged to patients to the Office of Statewide Health Planning and Development (OSHPD). Beginning in 2004, hospitals were required to make this information available to the public. Under the 2003 law, "small and rural" hospitals are exempt from the reporting requirements.
An analysis of 2004 data showed huge disparities in what different hospitals charge for the same procedures. For example, Scripps Memorial in La Jolla charged $881.90 for a head/brain CT/-scan. For the same procedure, San Francisco General charged $950, Sutter General in Sacramento charged $2,807, and Cedars-Sinai in Los Angeles charged $4,037.61.
Beginning in the 1970's, Maryland has protected the stability of its hospital system through an independent commission that determines appropriate reimbursements for hospitals, and all payers are required to pay commission-approved rates. The system ensures access to essential services, controls prices and rationalizes cost shifting, where payments from the insured or taxpayer commonly cover the uninsured. Maryland is one of the few states where the hospital system is not overburdened or insolvent.
The rate-setting system for Maryland hospitals operates under the principles that similar services at similar hospitals should cost the same; that charges should be related to actual costs; and that all payers should share the burden of "uncompensated" care for the uninsured. The system has had widespread support and has been a success in reducing the costs of care.
Public utility regulation of health services in California would create an independent body with representation from patients, providers and other stakeholders to determine the equity of the financing of vital community medical infrastructure and to guarantee adequate public access to emergency rooms and hospitals. For example, the cost-control commission could set reasonable limits on profit-taking by hospitals, HMOs and doctors and guarantee sufficient payments to providers.
For more information about AB 1672 (Frommer), chargemasters and OSHPD go to: this site
FTCR is conducting health care town halls throughout California with patients, business owners, doctors, nurses and hospital executives. A common theme of these meetings has been the need to rid the health care system of waste, inefficiency and profiteering and to reinvest savings to increase access to care.
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Fri Jul 01, 2005
Dealing with Medical Claim Denials: Don't Try This at Home
While the nation struggles with a nursing shortage, nurses are struggling with medical insurance denials. For a flavor of how complex this subject has become, study the following seminar flyer, which offers them fifteen hours of continuing education, not on how to treat patients but rather on how to deal with insurers.
We've used your feedback to develop the conference you asked for! Learning objectives include:
- Learn how to prevent denials before they occur through effective front-end management, partnering with payers, and effective managed care contracting.
- Learn how to reduce denials through tracking and reporting, creating a dedicated denial management team, holding departments and payers accountable, implementing an automated denial tracking system, and utilizing a physician advisor.
- Learn how to overturn denials through creating a dedicated appeals department, writing effective appeals, and engaging physicians in the denial management and appeal processes.
Find out how winning healthcare organizations:
- Develop strategies for reducing both clinical and technical denials
- Build a multidisciplinary team dedicated to reducing denials
- Establish measurements and accountability tools for denial management
- Develop performance improvement measures to create strategies for denial reduction while improving relationships with payers, customers, and interacting departments
- Leverage information technology to support the collection of quality data that is available and retrievable to sustain appeals
- Use denial data analysis to interpret denial patterns, identify utilization management problems, and determine strategies for improvement
- Create a proactive process for denial prevention focusing on admission procedures, observation practices, inpatient management and retroactive reviews
- Establish a denial management program throughout a multiple hospital system
- Hold payers accountable for their errors
- Educate physicians and case managers on contracts and reimbursement
- Track denials and appeals to ensure timeliness
- Determine a process workflow for denial recovery responsibility
- Maximize preauthorization and minimize concurrent or retrospective review
- Motivate staff and capitalize on teamwork to support goals
- Prioritize denial appeal work processes to maximize productivity and outcomes
- Utilize a physician advisor as part of a disciplined methodology to reduce denials
Approved for 15 contact hour(s) of continuing education for RNs, LPNs, LVNs and NPs. This program is cosponsored with Medical Education Collaborative, Inc. (MEC) and World Research Group. MEC is accredited as a provider of continuing nursing education by the American Nurses Credentialing Center�s Commission on Accreditation. Provider approved by the California Board of Registered Nursing, Provider Number CEP 12990, for 15 contact hour(s). Hear unique, innovative case studies and insights demonstrating what successful hospitals have done to reduce denials and recover lost revenue:
Denials Management from the Ground Up
Mountain State Health Alliance
Denial Management Plus "Teamwork" Equals Positive Outcomes!
Sharp Grossmont Hospital
Analysis of Payer Denials as a Strategy to
Maximize Utilization Outcomes
Northwestern Memorial Hospital
Death By a Thousand Cuts: Lessons in Denial Management
SSM St. Mary’s Health Care Center
Accountability in the Management of Denials
through the Revenue Cycle
Saint Clare’s Health System
Holding Payers Accountable through Custom Reporting
Denial Prevention Practices – "You Don’t Have to Appeal a Denial You Don’t Have"
Tomball Regional Hospital
Using Denial Data to Improve UM and
Revenue Cycle/Denial Management
Improvements in the Academic Setting
The Emory Clinic
Identifying and Tracking the Causes of Denials
Mercy Medical Center
Using Claims Denial Information to Improve Processes and Minimize Future Denials
Brigham and Women’s Hospital
Analysis and Negotiation of Contracts to Manage Denials
Jenkens & Gilchrist
Recovering Revenue – Effective Appeal
Strategies and Measures
Cook Children’s Hospital
Understanding the Financial Implications of a Denial: Leading the Clinician Out of the Dark
Parma Community General Hospital
A Systematic Approach to Denial Reduction:
A Multidisciplinary Approach to a Complex
HCA Southeast Division
Executive Health Resources
DON'T MISS OUR IN-DEPTH, INTERACTIVE PRE-CONFERENCE WORKSHOPS:
- How to Make Great Presentations and Write Powerful Letters to Prevent and Appeal Adverse Determiniations
- Integrating Clinicians Into the Revenue Cycle: How to Create a Successful Concurrent and Retrospective Clinical Denial Appeals Process that Does More than Just Recoup Revenue
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Frist to Drug Companies: Restrict Advertisements to Consumers
U.S. Senate Majority Leader William Frist (R-TN) today called for pharmaceutical companies to voluntarily restrict their direct to consumer advertising efforts during new drugs� first two years on the market. In addition, Frist is seeking a Government Accountability Office (GAO) review of Food and Drug Administration (FDA) oversight of prescription drug activities, the pharmaceutical industry�s spending on such advertising, and the apparent impact on utilization, health care spending, patient education and awareness, according to a press release from his office.
�In recent years, spending on direct-to-consumer advertising of prescription drugs has skyrocketed,� said Frist. �This advertising can lead to inappropriate prescribing and fuel prescription drug spending. It can also oversell benefits and undersell risks. Used appropriately, direct-to-consumer advertising can empower patients without inflating need or distorting medical realities. But research evidence indicates that this blitz in direct marketing has unwittingly led to inappropriate prescribing, which most importantly can compromise patient safety and care.
�That�s why I�m calling for pharmaceutical companies to implement a voluntary two year restriction on direct-to-consumer advertising efforts for newly released drugs. Furthermore, I�m requesting that the General Accountability Office analyze the FDA�s oversight of prescription drug advertising, the pharmaceutical industry�s spending on such advertising, and the potential impact on utilization, health care spending, patient education and awareness.
�Failure to appropriately monitor and regulate direct-to-consumer drug advertising compromises the safety of the very patients we intend to help. I encourage the industry to allow doctors and patients alike to learn more about the potential benefits and risks of new treatments, so we can be sure we are putting the needs, interests and safety of our patients first.�
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Health Care Dispute Helps Cause Minnesota State Shutdown
Labor-management disputes over health care benefits that cause a business to shut down are a familiar story, but today a legislature-governor dispute largely over health benefits caused the state of Minnesota to shut down.
According to the St. Paul Pioneer Press, disputes over health care as well as over legislation prevented the Democratic state senate from reaching a budget agreement with the Republican governor.
Despite the shutdown, a court order currently keeps Minnesota's subsidized health care programs as well as other essential services working, the Minneapolis Star Tribune reports.
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Long-Distance Surgery: They Can Now Operate on You Without Even Scrubbing In
Surgeons can now operate on patients who are not even in the same room that they are in.
Advanced Imaging Magazine describes how this can be done. Telemedicine, using high tech long distance imaging and robotics, is the key.
As previously reported, a "global hospital" may be emerging in which doctors in India treat patients located in America.
This could cut medical costs, because health care in India costs much less than it does in the United States.
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Bill to Encourage Electronic Medical Records Introduced in Senate.
U.S. Senator Mike Enzi, R-Wyo., introduced a bill on June 30 that would start the process of shifting health records from a paper-based system to a secure electronic format to help patients, especially in rural areas, keep track of medical records, according to a press release from his office.
�The technology is there - it�s just a matter of clearing away the obstacles so we can apply it to healthcare. If we move from a paper-based system to secure electronic medical records, we will reduce mistakes, save lives, time and money,� said Enzi, Chairman of the Health, Education, Labor and Pensions (HELP) Committee.
However, as previously reported, critics state electronic medical records could invade patient privacy.
The Better Healthcare Through Information Technology Act would help eliminate many common frustrations that patients and their doctors face every day because of the antiquated systems of maintaining paper medical records, according to Enzi. The bill was introduced during a news conference in the capitol building with HELP Committee ranking member Edward Kennedy, D-Mass, and Chairman of the Senate Finance Committee, Senator Chuck Grassley, R-Iowa, and Senator Max Baucus, D-Mont., ranking member of the Finance Committee.
�This issue is being addressed by multiple committees and is backed by members on both sides of the aisle,� said Enzi. �This kind of support should give the bill legs.�
Enzi�s Wyoming colleague, Senator Craig Thomas, a member of the Senate Finance Committee is also a cosponsor of Enzi�s bill.
�I appreciate Senator Enzi�s leadership on this important issue to improve our health information technology network,� Thomas said.
The bill would create a public-private collaborative effort for developing technical standards and provide start-up money for hospitals and physicians to utilize new technology. Enzi said patients in rural and underserved health care areas would have better and more efficient healthcare if hospitals and physicians were trained in new information technology.
The bill would encourage medical schools and teaching hospitals to experiment with innovative ways to build health information technology education into the next generation of doctors, nurses and pharmacists.
�We�ve drafted a bill to bring the government and the private sector together to make healthcare better, safer and more efficient by accelerating the adoption of information technology across our healthcare system,� said Enzi.
Enzi pointed out key provisions in the bill that would:
� protect the privacy and security of health information;
� foster the widespread adoption of health information technology;
� establish the public-private American Health Information Collaborative to identify uniform national data standards and implement policies for widespread adoption of health information technology;
� establish health information network demonstration programs;
� award grants to facilitate the purchase and enhance the utilization of qualified health information technology; and
� award grants to states for the development of state loan programs to facilitate the widespread adoption of qualified health information technology.
Grassley and Baucus unveiled the Medicare Value Purchasing Act which would reward health care providers with higher Medicare payments if they deliver care that meets or exceeds quality expectations.
Senator Kennedy's comments on this act are set forth in the "More" section below:
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Bayh Introduces Legislation to Help Small Businesses With Rising Cost of Health Care
U.S. Senator Evan Bayh on June 29 targeted what his press release states is the number-one problem confronting small business owners by introducing legislation to help small businesses with the soaring costs of providing health care for their employees. Bayh's bill would provide a health care tax credit to small businesses with up to 100 employees and would also allow companies to join purchasing pools so that they can negotiate lower rates with insurance companies.
"Soaring premiums and high administrative costs have forced many small businesses to give up on providing health insurance," Senator Bayh said. "At a time when small businesses are creating 60 to 80 percent of new jobs nationwide, we need to do everything possible to help them and their workers succeed. My legislation hits the health care problem head on, helping employers offer much-needed health coverage to hardworking, middle-class families while continuing to grow their companies."
Providing health insurance is one of the largest problems currently facing small business owners. According to a study by the Kaiser Family Foundation, only 49 percent of companies with up to 100 employees offer health coverage, as compared to 98 percent of all large firms. Premiums have been increasing at historic rates for small businesses that currently provide health care. For example, premiums for companies with ten or fewer employees grew by 16.5 percent in 2001.
As previously reported, California appears near a downward spiral where fewer and fewer employers are willing to provide health insurance benefits. This report states that in five years, other states will likewise near this spiral.
Bayh's bill provides up to a 50% tax credit to small businesses that currently offer health benefits and includes additional provisions to encourage other small businesses to begin offering coverage. In addition to the tax credit, Bayh's legislation also encourages small businesses to join state-run purchasing pools to increase their bargaining power with health insurance companies. By joining a purchasing pool, small businesses could obtain lower rates and greater options, meaning better health coverage for employees. The legislation could help as many as 114,000 Hoosier small businesses.
Evansville Welding Supply in Evansville, Indiana, is one of the thousands of Hoosier businesses that could benefit from Bayh's bill, the press release states. Co-owner Shannon Long says his company's health care costs have increased by 19 percent in the past two years and are expected to rise by another 35 percent next year, making it increasingly difficult to provide health insurance for his six employees.
"Small businesses like Evansville Welding Supply shouldn't have to see their hardwork sacrificed to cover wildly increasing health care costs," Senator Bayh said. "Relieving the stress of high health care costs is critical to ensuring that small businesses continue to create new opportunities for economic growth across Indiana and the nation."
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