Health Care Reform

The one good thing about the debate thus far has been my ability to procrastinate.  Frankly, I’ve been happy that nothing definitive has passed either the House or the Senate.  Not for any particular partisan or ideological reason, but simply because once it does, I, and a lot of attorneys I know, will have a lot of primary source reading to do.   Summaries suffice until laws are passed and language must be parsed.  That time may be about here with the vote yesterday on H.R. 3962.

Recently a client, who is also taking an MBA course, asked if I had any useful information about the health care reform debate.   She wanted less highly technical materials; she wanted materials she could use to understand the debate and that were not completely uninteresting.   I told her I had a few decent links of materials I’d read over the last six months or so.  Some I’ve highlighted here.

• This American Life.   In two programs, “More Is Less” and “Someone Else’s Money”  they spend a couple hours, in TAL’s original ‘explain it through an anecdote’ kind of way, exploring factors influencing health care inflation and how our employer driven health insurance system evolved into what it is today.   They did the programs with NPR News and specifically the Planet Money folks that helped with their amazing programs on the financial crisis — “The Great Pool of Money” and “Bad Bank.”

• How American Health Care Killed my Father, by David Goldhill (Atlantic, September 2009).  A very readable and personalized discussion of distortions in the American healthcare system.  Final argument is that health care insurance reform should look at forcing more financial obligations on patients and move toward catastrophic coverage.   David Brooks mentioned this article in an op-ed piece he wrote.

• The Cost Conundrum, Atul Gawande (New Yorker, June 2009).   I discuss the article here.  This is important since it was very widely discussed and it’s themes regarding variations in health care spending (many arguing as necessary to fix to “bend the curve”), has gotten a lot of attention.  I also noted a recent HHS-OIG settlement in McAllen; of interest due to my discussion.

• Lost in the Shuffle: The Overarching Goals of Healthcare Reform, Uwe Reinhardt (New York Times, September 2009).  Professor Reinhardt suscinctly sets out the economic objectives of the current health care reform debate.

• Health Policy Brief – Public Health Insurance Plan, Health Affairs (Health Affairs, June 2009).  Due to the inordinate attention to be or not to be over a public plan, I suggested this quick summary to her.

• Health Care Inflation Trends.  Since one major component of health care reform is ‘bending the curve’, what of health care inflation?  I pointed out one post from a blog I follow that succinctly summarizes Medicare, Medicaid projections.  I also suggest a private analysis discussing health care spending inflation and the impact on reform concluding “given that the current path of GDP and consumption appears to be sustainable for only another decade, reform of the federal health care programs and a realignment of the health care sector will occur soon.”

• Side by Side Comparison of Major Health Care Reform Proposals.  I also suggested this interactive chart allowing you to compare various of the major health care reform proposals and analyze them side by side.

If I were giving to her today, I’d probably add:

• Some Vaguely Heretical Thoughts on Health-Care Reform, John Cassidy (New Yorker, Rational Irrationality Blog, November 2009).  Discussion of H.B. 3962 and what it achieves and does not.

 

Filed under: Health Law, Reform, Health Reform, Healthcare, LinkedIn

Another View – Get Rid of Comprehensive Healthcare Insurance?

Thanks to Paul Levy’s Running a Hospital blog for putting me onto this article.  I started reading this too late but could not pull myself away from it.

If you are pondering health care reform this season, “How American Health Care Killed My Father” by David Goldhill should be something you read.  He’s an outsider to health care finance and delivery and a consumer that has had the healthcare system profoundly (and negatively) affect his family.

With this personal interest, he’s become quite focused on the question: how can a technically advanced, high cost, reputable, New York area hospital with caring, highly educated and highly skilled physicians and nurses allow his father to die from a facility acquired infection avoidable (probably) by adequate hand-washing protocols?  The experience has led him to an “obsession with [the] health-care system” and to start asking how could it possibly be structured the way that it is.   With this background, he asks whether today’s proposed reforms actually fix what he understands to be wrong with the American health care system?  His conclusion is no:

The most important single step we can take toward truly reforming our system is to move away from comprehensive health insurance as the single model for financing care. And a guiding principle of any reform should be to put the consumer, not the insurer or the government, at the center of the system. I believe if the government took on the goal of better supporting consumers—by bringing greater transparency and competition to the health-care industry, and by directly subsidizing those who can’t afford care—we’d find that consumers could buy much more of their care directly than we might initially think, and that over time we’d see better care and better service, at lower cost, as a result.

A more consumer-centered health-care system would not rely on a single form of financing for health-care purchases; it would make use of different sorts of financing for different elements of care—with routine care funded largely out of our incomes; major, predictable expenses (including much end-of-life care) funded by savings and credit; and massive, unpredictable expenses funded by insurance.

I take issue with some of what he writes, particularly about hospitals.  Nonetheless, it is worth a read and some serious thought, whether you agree or not with all of his statements, conclusions and his solution.

via How American Health Care Killed My Father – The Atlantic (September 2009).

Filed under: Health Law, Reform, Economics, Health Law, Health Reform, LinkedIn

H1N1, CDC, CMS and EMTALA

In a follow-up to previous posts (here, here) on H1N1, I’m catching up on reading from this week and I must have missed the White House’s report on possible effects of a resurgence of the swine flu pandemic this fall and winter.   I read through the report and it is eye opening, although not as dire as some possible scenarios presented by at least some for a pandemic avian flu.  According to the White House advisory panel report a possible scenario would:

•produce infection of 30–50% of the U.S. population this fall and winter, with symptoms in approximately 20–40% of the population (60–120 million people), more than half of whom would seek medical attention.
•lead to as many as 1.8 million U.S. hospital admissions during the epidemic, with up to 300,000 patients requiring care in intensive care units (ICUs). Importantly, these very ill patients could occupy 50–100 percent of all ICU beds in affected regions of the country at the peak of the epidemic and could place enormous stress on ICU units, which normally operate close to capacity.
•cause between 30,000 and 90,000 deaths in the United States, concentrated among children
and young adults. In contrast, the 30,000–40,000 annual deaths typically associated with seasonal flu in the United States occur mainly among people over 65. As a result, 2009-H1N1 would lead to many more years of life lost.
•pose especially high risks for individuals with certain pre-existing conditions, including pregnant women and patients with neurological disorders or respiratory impairment, diabetes, or severe obesity and possibly for certain populations, such as Native Americans.

The NY Times later reported that the CDC had indicated that this was not a “likely scenario,” which may be reassuring.

Also of note, The Centers for Medicare & Medicaid Services  issued a memo and fact sheet clarifying permissible options under the Emergency Medical Treatment and Labor Act for hospitals handling a surge in patients with swine flu.  The fact sheet discusses options for hospitals experiencing surges with and without a declared ‘waiver’ of EMTALA (requiring presidential emergency declaration and certain other actions), including out of department medical screening exams and off-campus flu screening centers.

PCAST_H1N1_Report.pdf (application/pdf Object).

Filed under: Health Law, Public Health, EMTALA, Health Law, LinkedIn, Pandemic

Healthcare Economic – Supply/Demand Side Goals to Reform

Over the years Uwe E. Reinhardt has written, lectured and testified extensively on health care economics, alternative health care financing and delivery systems (e.g., here and here) and health care financing and delivery reform in the United States.  He’s one of those guys I recall studying back in undergraduate health care economics classes (who can forget a name like Uwe).

In a recent NYT Economix blog post he provides succinct economics supply side/demand side breakdown of what the general economic goals are for health care financing and delivery reform as currently evisioned.  I thought was a useful way of looking at the (rational) parts of the current debate.   I emphatically take no position on health care reform policy initiatives, but in light of so much of the rather less than civil polemics I see around the policy debate, this seems a return to basic analytics of what might be accomplished through reform.

1. Financial barriers should not stand between Americans and preventive or acute health care that they sincerely believe will address concerns over a troubling medical condition, in a timely manner, before that condition grows into a critically serious illness.

2. Having received needed health care, no American family should be so financially devastated by medical bills that it cannot meet routine daily living expenses — for example, make utility or mortgage payments on time or finance the education of the family’s children.

3. The future growth in national health spending should be constrained to fall significantly below currently projected spending growth, which has the United States devoting about 40 percent of its G.D.P. to health care by midcentury.All other goals are subordinate to these three overarching goals, as are the means to reach them.

He breaks it down into into one slide — which I think, again, fairly succinctly states the targeted supply/demand side areas:

I found it natural to categorize these components into those aimed mainly at reforming the demand side of the health sector, those aimed mainly at the supply side, and those cutting across both sides — e.g., payment reform and overall cost control.health care delivery

He then discusses the time frame for reform.   He feels with good reason that the supply side fix (top left box), while incredibly challenging, would be achievable through current legislation.   He indicates, however, that it would not be particularly successful unless certain core requirements are met to address the adverse selection/moral hazard problems inherent in the fix.

He notes, however, that the right box and the cross-cutting payment reform (bottom boxes) can only be accomplished over a much extended period due to their complexity, lack of current infrastructure (e.g., systemic and cross-functional EHR systems, solid quality measurement systems, systems whereby health care providers can assume and manage financial risk for populations) and a public policy and business driven process of how to actually move from FFS systems to some form of bundled payment or capitation.

If 1) either private or public health insurers must accept all comers and may not base premiums on the applicant’s health status, then 2)  individuals must be mandated to purchase at least a basic package of health insurance, lest they freeload on the system. Such a mandate, in turn, requires that 3) families be publicly subsidized to make the cost of that basic package affordable to them. A sound reform of the health insurance market cannot have just two of these features. It must have all three.

****

Designing and implementing the rest of the reform agenda in the chart — reforming the supply side, payment reform and cost control — is a much longer-run effort that may take an entire decade or more. It is more challenging than was landing a man on the moon, as no moneyed lunar interest groups sought to prevent man’s visit there.

The delema should be obvious.  Given Dr. Reinhardt’s core requirements for supply side reform, the ability to subsidize #1 (preventative intervention) and #2 (insurance against catostrophic financial loss due to illness) universally is going to be extraordinarily costly to public fisc.  Without management of #3 (which isn’t going to come without significant challenge) the money must come from somewhere.  And, of course, if #3 is not achievable for some unspecified extended period, gap financing is necessary.   Richard Posner recently has a post on just this point.

Filed under: Health Law, Personal Posts, Reform, Economics, Health Law, Health Reform, LinkedIn

Rights to the Bits and Bytes in Your EHR

Back in 2001, right before the HIPAA privacy rules took effect, I wrote a law school student note entitled “The Emergence of the Health Care Information Trust.”  Pretty heady, and perhaps a bit Pollyanna-ish, stuff.  In the note I argued that to pull the hidden value of disparate health care information out of the islands of digital data that had been forming throughout the health care system, some form of clearing house for patients, with strong fiduciary obligation to individual patients participants, needed to emerge.  In fact, because of HIPAA’s soon to be finalized privacy regulations, without patients expressly vesting rights in something like a health care data aggregator,  it would be very difficult (if not impossible) to use the information commercially for purposes other than directly for healthcare treatment, payment, operations and certain research.  Further, the value in that data would not be able to accrue to the individual any other way.  My concept was to allow use of patient data, with defined limitations set by the patient, with micropayments to patients for such patient approved use by anyone seeking to access the aggregated data.

Anyway, the eight years since I wrote the article, I am not sure where the health care data market is going.  But there are some services that seem to be starting to emerge as potential aggregators.  Most notably, both Microsoft and Google have been taking initiatives in the area.  Of course, Microsoft and Google are not what I had projected; but it probably makes more sense in hindsight that the two biggest IT juggernaughts would be making headways into this this very young market with unknown potential.  If anything, the ability to pull good, useful and linkable health care information (except maybe healthcare claims data) is a monumental problem, and true electronic medical records are, at best, still in their infancy.  So, also, the immediate possibilities of wide-scale transfers to such aggregators.

One of the obvious limitations, even if and when health record data is transferable without impossibly difficult transactional barriers and costs, is the fact that the privacy regulations are really set up to address patient rights in principally paper records.   So, even if you wished to transmit electronic data to an aggregator service (be it my concept of a Healthcare Information Trust or, for that matter, Google or Microsoft), there are no express provisions addressing this.

So I found it interesting when I read about “A Declaration of Health Data Rights.”  In it, the organization specifically makes mention to access to records in “computable form.”  Also, in reading about the initiative in the NYT’s Bits blog, I took particular note that both Microsoft and Google have a role in it.  Ah, this makes some sense now.

For what its worth, the group desires:

A Declaration of Health Data Rights

In an era when technology allows personal health information to be more easily stored, updated, accessed and exchanged, the following rights should be self-evident and inalienable. We the people:

1. Have the right to our own health data

2. Have the right to know the source of each health data element

3. Have the right to take possession of a complete copy of our individual health data, without delay, at minimal or no cost; if data exist in computable form, they must be made available in that form

4. Have the right to share our health data with others as we see fit

These principles express basic human rights as well as essential elements of health care that is participatory, appropriate and in the interests of each patient. No law or policy should abridge these rights.

via HealthDataRights.org.

Filed under: Health Law, HIPAA, Electronic Health Record, Health Law, HIPAA, LinkedIn

No Country for the Public Plan Option

In today’s The Health Care Blog, Jeff Goldsmith provides remarks in an article entitle No Country for Old Men, which, perhaps, should be called “No Country for the Public Plan Option.”  An interesting read with some observations about the systemic risks for a public plan option and the challenges its proposal presents to political success for healthcare reform this time around.  After significant discussion, Mr. Goldsmith concludes “[r]ather than wasting scarce political capital on the public plan, health reformers need to focus on hospital and primary care physician payment reform, expanding Medicare coverage for the almost 11 million uninsured boomers and sensible design of a federal health insurance exchange.   It isn’t going to take a miracle to get this important public task done, just focus and discipline.” The Health Care Blog: No Country for Old Men.

Filed under: Health Law, Payment, Reform, Health Reform, LinkedIn

Who are the Uninsured?

Back in 2005, I co-authored an article with Richard Stuhan, a partner at Jones Day.  The article was primarily about the concerted and misguided  efforts to sue non-profit hospitals for their alleged failure to provide charity care.  The plaintiffs contended that such provision of charity care was a legal obligations of 501(c)(3) tax exempt entities.   These suits, while striking the public policy cord concerning the plight of the uninsured and the inflation of health care costs and charges, were based upon ill conceived legal theories and, accordingly,  failed miserably.  But they probably were a precursor of congressional interest in charity care provided by non-profit hospitals and health systems — which is currently playing out and has resulted in some significant changes, most notably the new Form 990s.

One of the items we briefly discussed in that article, an issue that should be a major large part of the health care reform debate, is the scope of the health care insurance (or, more particularly, uninsured) problem in the United States.  Who accounts for the uninsured figures and why are they uninsured is critical to forming the debate about solutions.  The debate, I would think, is fundamentally different if a substantial portion of the uninsured could afford insurance or could access other forms of insurance (SCHIP, Medicaid, etc.), but decide for personal reasons not to obtain insurance or face administrative, educational or transactional barriers to signing-up for federal or state-sponsored insurance programs for which they would otherwise be eligible.   Circa 2003, the uninsured level was approximately 45 million, but a very significant portion of this populations was either eligible for federal or state programs or were from households that were significantly above the federal poverty level and could, technically, afford insurance.

Periodically, this issue has popped up with one study or another discussing the scope of the uninsured problem — addressing who are they, why are they not insured.   Of course, with this new round of health care reform, the issue of the uninsured should be front in center in the debate.  Recently, a report was issued entitled WHO ARE THE UNINSURED? An Analysis of the Characteristics of Americans Without Health Insurance by the Employment Policies Institute.   This seems to be a fairly politicized organization that has written studies before that have been scorned by some.   So, with that disclaimer and taking the study with a grain of salt, its conclusions are still notable. Assuming its numbers are correct, approximately 43% of the 2006 18-64 year-old uninsured are in households at greater than 2.5x the federal poverty limit.  This is not inconsistent with previous studies I had seen and I would think could be fact checked.

By no means does this take away from the significant and troubling 47% who are involuntarily uninsured.   But the number of individuals and households that have the means to, but choose not to, purchase health care insurance is important to the current debate.  What impact does this very significant portion of the uninsured have for risks of adverse selection, individual/employer mandatory coverage requirements, the level FPL subsidies and other components of healthcare reform bills being proposed.

Filed under: Health Law, Reform, Health Law, Health Reform, LinkedIn, Public Health, Public Policy

Variations in Healthcare Spending – Anchor-Tenant Theory and Fraud and Abuse?

The New Yorker recently had a very interesting expose discussing one of the fundamental economic challenges of healthcare reform.  (Gawande, Atul, The Cost Conundrum: What a Texas town can teach us about health care, June 1, 2009).  Peter Orszag gave a presentation last year at the American Health Lawyers meeting in San Franscisco that I was able to hear.  Mr. Orszag, President Obama’s budget director and formerly head of the Congressional Budget Office, has observed repeatedly (and is quoted in this article as saying) that “[n]early thirty per cent of Medicare’s costs could be saved without negatively affecting health outcomes if spending in high- and medium-cost areas could be reduced to the level in low-cost areas.”  He, and many healthcare economists’ observe, that there is a tremendous amount of variation in healthcare spending throughout various regions of the country that simply cannot be explained after controling for demographics, illness indexes/cases mixes, cost indexes and other similar factors.  And, most importantly, outcomes are no better in higher spending areas.

This New Yorker article paints a narrative story surrounding this frequent observations by looking at case of McAllen, Texas.  McAllen has the particular notoriety of having the highest per capital Medicare spending in the nation.   I think it is an important read for healthcare counsel because of some of the author’s tangential commentary linking McAllen’s higher per capita spending with a culture that could have support higher incidents of fraud and abuse.

According to the article, McAllen spends (using 2006 data) approximately $15,000 per Medicare enrollee.  This is more than twice of what El Paso, Texas, with very similar demographics and population factors, pays.  It is also more than twice what the region surrounding the Mayo Clinic spends.  Ironically, the per capital Medicare spending is more than McAllen’s per capita income.

The New Yorker author discusses this fact with some local physicians who have no idea of this distinction for their community:

One night, I went to dinner with six McAllen doctors. All were what you would call bread-and-butter physicians: busy, full-time, private-practice doctors who work from seven in the morning to seven at night and sometimes later, their waiting rooms teeming and their desks stacked with medical charts to review.  Some were dubious when I told them that McAllen was the country’s most expensive place for health care. I gave them the spending data from Medicare. In 1992, in the McAllen market, the average cost per Medicare enrollee was $4,891, almost exactly the national average. But since then, year after year, McAllen’s health costs have grown faster than any other market in the country, ultimately soaring by more than ten thousand dollars per person. “Maybe the service is better here,” the cardiologist suggested. People can be seen faster and get their tests more readily, he said.  Others were skeptical. “I don’t think that explains the costs he’s talking about,” the general surgeon said. “It’s malpractice,” a family physician who had practiced here for thirty-three years said. “McAllen is legal hell,” the cardiologist agreed. Doctors order unnecessary tests just to protect themselves, he said. Everyone thought the lawyers here were worse than elsewhere. That explanation puzzled me. Several years ago, Texas passed a tough malpractice law that capped pain-and-suffering awards at two hundred and fifty thousand dollars. Didn’t lawsuits go down? “Practically to zero,” the cardiologist admitted. “Come on,” the general surgeon finally said. “We all know these arguments are bullshit. There is overutilization here, pure and simple.” Doctors, he said, were racking up charges with extra tests, services, and procedures.  The surgeon came to McAllen in the mid-nineties, and since then, he said, “the way to practice medicine has changed completely. Before, it was about how to do a good job. Now it is about ‘How much will you benefit?’ ”

via Annals of Medicine: The Cost Conundrum: Reporting & Essays: The New Yorker.

What is the basis for the higher per capita Medicare spending?

To determine whether overuse of medical care was really the problem in McAllen, I turned to Jonathan Skinner, an economist at Dartmouth’s Institute for Health Policy and Clinical Practice, which has three decades of expertise in examining regional patterns in Medicare payment data. I also turned to two private firms—D2Hawkeye, an independent company, and Ingenix, UnitedHealthcare’s data-analysis company—to analyze commercial insurance data for McAllen. The answer was yes. Compared with patients in El Paso and nationwide, patients in McAllen got more of pretty much everything—more diagnostic testing, more hospital treatment, more surgery, more home care.  The Medicare payment data provided the most detail. Between 2001 and 2005, critically ill Medicare patients received almost fifty per cent more specialist visits in McAllen than in El Paso, and were two-thirds more likely to see ten or more specialists in a six-month period. In 2005 and 2006, patients in McAllen received twenty per cent more abdominal ultrasounds, thirty per cent more bone-density studies, sixty per cent more stress tests with echocardiography, two hundred per cent more nerve-conduction studies to diagnose carpal-tunnel syndrome, and five hundred and fifty per cent more urine-flow studies to diagnose prostate troubles. They received one-fifth to two-thirds more gallbladder operations, knee replacements, breast biopsies, and bladder scopes. They also received two to three times as many pacemakers, implantable defibrillators, cardiac-bypass operations, carotid endarterectomies, and coronary-artery stents. And Medicare paid for five times as many home-nurse visits.

The author discusses the high utilization and costs with various hospital executives, who, like the physicians interviewed, also do not know that McAllen is the most expensive place in the country for Medicare beneficiaries.  The executives of the hospitals, to the author’s belief, authentically did not know their peculiar notariety and, not even recognizing it as an issue, had no truly thoughtful responses as to why it might be.

Local executives for hospitals and clinics and home-health agencies understand their growth rate and their market share; they know whether they are losing money or making money. They know that if their doctors bring in enough business—surgery, imaging, home-nursing referrals—they make money; and if they get the doctors to bring in more, they make more. But they have only the vaguest notion of whether the doctors are making their communities as healthy as they can, or whether they are more or less efficient than their counterparts elsewhere. A doctor sees a patient in clinic, and has her check into a McAllen hospital for a CT scan, an ultrasound, three rounds of blood tests, another ultrasound, and then surgery to have her gallbladder removed. How [are the hospital executives] to know whether all that is essential, let alone the best possible treatment for the patient? It isn’t what they are responsible or accountable for.  Health-care costs ultimately arise from the accumulation of individual decisions doctors make about which services and treatments to write an order for. The most expensive piece of medical equipment, as the saying goes, is a doctor’s pen. And, as a rule, hospital executives don’t own the pen caps. Doctors do.

The article suggests, with only a little explanation, that the variation between communities such as McAllen and, in contrast, El Paso or other lower cost regions (with at least the same if not better quality institutions) might be due to an  “anchor tenant theory of economic development.”  Certain markets develop their own economic character, similar to how a mall may be defined by its anchor tenant.  So, the theory goes, certain “anchor tenants” in a market may allow, for example, the development of regional specialization (e.g., biotechnology development in certain cities – Boston, San Franscisco and not in others with similar apparent resources).   Twisting this model a bit, the author posits that the entrepenurial focus of physician medicine in McAllen, changing from the 1990s to present, may be a significant part of the increase in costs.  McAllen was near the median in per capita spending a decade ago.  Importantly, the author then goes on to point out anecdotal evidence of some serious antikickback statute violations — solicitation by certain unnamed physicians of medical directorships in exchange for referrals to hospitals and home health agencies.

This linkage — which is not well developed by the author — is nonetheless a beware moment.   If higher per capita Medicare spending is linked by government enforcement agencies as a proxy for potential higher rates of fraud and abuse behavior, one might see a new horizon for focusing fraud enforcement .  Perhaps this is a stretch – but an interesting linkage is being made here by the author.  It is all the more important due to the prestige of the publication and that the fundamentals of this story find their genesis in the economic theory of healthcare inflation that is the focus of leaders within the current administration.

The author goes on to make a fairly classical example of the challenges of asymetical information in healthcare coupled with the fee-for-service basis of physician payments:

Providing health care is like building a house. The task requires experts, expensive equipment and materials, and a huge amount of coördination. Imagine that, instead of paying a contractor to pull a team together and keep them on track, you paid an electrician for every outlet he recommends, a plumber for every faucet, and a carpenter for every cabinet. Would you be surprised if you got a house with a thousand outlets, faucets, and cabinets, at three times the cost you expected, and the whole thing fell apart a couple of years later? Getting the country’s best electrician on the job (he trained at Harvard, somebody tells you) isn’t going to solve this problem. Nor will changing the person who writes him the check.

The author aruges that changing the payor (i.e., government plan competitor, single payor system) will not change this problem.  Even putting the consumer on the hook through medical savings accounts or high deductible plans won’t solve it (if a physician recommends a cardiac bypass, is the patient going to negotiate with the cardiologist, radiologist, anesthesiologist, cardiothoracic surgeon and hospital over expense or the scope of the procedure?).

Then the author suggest that only flipping the economic model might fix this.  The author isn’t quite specific in how this might be accomplished, although he goes to length to contrast the McAllen “anchor-tenant” model with other “anchor-tenant” models of healthcare (e.g., Mayo), suggesting this is the crux of the problem – what kind of medical care provision culture the United States will be developing based upon the economic incentives that are established by insurance payor systems we perpetuate or change through reform.  Not by who cuts the check.

This is worth the read because it sets a story narrative for the harder data Mr. Orszag and others have frequently discussed as healthcare reform is debated.

Filed under: AKS, Comparative Effectiveness Rearch, Health Law, Reform, AKS, Conflicts of Interest, Economics, Health Reform, LinkedIn

Effect of Exposure to Small Pharmaceutical Promotional Items on Treatment Preferences, May 11, 2009, Grande et al. 169 (9): 887

A new study finds that subtle exposure to branded pharmaceutical items, even without the social interactions of gifting, influence medical school student attitudes towards brands.  The study has some interesting discussion regarding “boomerang” response by some of the students from the institution that had strong rules prohibiting gifts.  This reaction may have some bearing on current efforts to ban gifts and marketing materials at healthcare institutions as well as the so-called “Sunshine Laws” at the federal and state levels regarding transparency of pharma and medical device marketing and financial arrangements, including gifting.

From the study’s commentary:

Our study finds that subtle exposures to branded pharmaceutical promotional items influences implicit attitudes of medical students toward pharmaceutical brands. The observed effect was modified by training year and school. Among third-year medical students, no significant experimental effects were observed. However, among fourth-year medical students there were significant effects at both schools in our study. Students at Miami responded as we hypothesized, shifting their preferences in the direction of the branding exposure (ie, Lipitor). However, students at Penn had a boomerang response, ie, a behavioral response opposite of the implied marketing intent.22 The most likely explanation for the difference across class year is that, as students advance in their training, they begin to form attitudes toward various treatment options that can be primed with branded promotional items. In comparison to third-year students, fourth-year students have had greater clinical experience and greater exposure to their clinical teachers and prevailing institutional practices.

The divergent effects at our 2 study schools are an interesting finding. At Penn, exposure to the branded items produced less favorable implicit attitudes. One potential explanation for this effect is that the strong school policy provided an external warning about specific persuasion tactics underlying pharmaceutical marketing. This information may have motivated some form of resistance by the audience23 that could have taken the form of simple message rejection or active counterarguing or careful message scrutiny.24 The policy therefore may have heightened the ability of the Penn students to exercise what has been termed “persuasion coping effectiveness”,25 which produces a goal within oneself to achieve one’s own current learning or attitudinal goal independently of what the marketer seems to be trying to accomplish. The differential attitudes observed in the marketing survey, with the Penn students exhibiting significantly more negative attitudes than those in the national sample or for the Miami students where no policy exists, support this explanation. At Miami, where students had more positive attitudes toward marketing, exposure to a branded promotional item likely primed more positive implicit associations.

via Arch Intern Med — Effect of Exposure to Small Pharmaceutical Promotional Items on Treatment Preferences, May 11, 2009, Grande et al. 169 (9): 887.

Filed under: Conflicts of Interest, Health Law, AKS, Conflicts of Interest, LinkedIn, Pharma

Sunshine in Vermont… Again. Vermont Senate Bill (S-048)

As reported in the NY Times Blog yesterday, the State of Vermont, which already had fairly strict provider financial arrangement reporting requirements for pharmaceutical companies doing business in the state, is slated to significantly limit gifts to providers by both pharmaceutical and medical device companies.  The new law, which, according to the NYT blog, will be signed by the governor, will prohibit all but certain enumerated gifts, revise reporting requirements by pharmaceutical companies and expand the reporting requirements to medical device manufactures.

The legislative bodies findings and intent, obviously influenced by the reporting thus far provided under the previous version of the law, outline its concerns, stating its belief that marketing practices can influence the rise in health care spending and that “state of Vermont has a substantial interest in cost containment and the protection of public health.” The legislature cites a number of findings leading to its adoption of the legislation:  (i) an IOM study linking gifts to prescribing behavior, (ii) recent federal crackdowns on medical device manufacturers’ alleged antikickback  violations (see my related post on the federal Sunshine Act), (iii) significant spending in the relatively small state of Vermont on pharma marketing (“[i]n fiscal year 2008, pharmaceutical manufacturers reported spending $2,935,248.00 in Vermont on fees, travel expenses, and other direct payments to Vermont physicians, hospitals, universities, and others”), (iv) the pharma industry’s focus on 100 physician opinion leaders for almost two-thirds of pharma’s spend (“approximately $2.1 million in payments went to physicians…[with the] top 100 individual recipients received nearly $1,770,000.00 in fiscal year 2008”) and prevalence of pharma’s spend throughout Vermont’s 4,573 licensed health care professionals, with 2,280 being recipients.   Based upon the legislation, the Vermont lawmakers certainly are frowning on the nearly $1M spent on food, noting that many food recipients received $1,000 or more spent on them.  One individual recipient, in fact, apparently receive over $15,000 in food.

The legislature concludes that the “act is necessary to increase transparency for consumers by requiring disclosure of allowable expenditures and gifts to health care providers and facilities providing health care [in order] to reduce real or perceived conflicts of interest which undermine patient confidence in health care providers and increase health care costs by influencing prescribing patterns.  Limitations on gifts and increased transparency are expected to save money for consumers, businesses, and the state by reducing the promotion of expensive prescription drugs, biological products, and medical devices, and to protect public health by reducing sales-oriented information to prescribers.”

The new law prohibits “any manufacturer of a prescribed product or any wholesale distributor of medical devices, or any agent thereof, to offer or give any gift to a health care provider.”  It provides that the  attorney general “may bring an action in Washington superior court for injunctive relief, costs, and attorney’s fees and may impose on a manufacturer that violates this section a civil penalty of no more than $10,000.00 per violation. Each unlawful gift shall constitute a separate violation.”

Permitted items that are not deemed prohibited gifts include:  (i) samples, (ii) limited short term evaluation use loaners of medical devices not exceeding 90 days, (iii) reasonable quantities of medical device demonstration or evaluation units to a health care provider to assess the appropriate use and function of the product, (iv) provision, distribution, dissemination, or receipt of peer-reviewed academic, scientific, or clinical articles or journals and other items that serve a genuine educational function, (v) scholarship or other support for medical students, residents, and fellows to attend a significant educational, scientific, or policy-making conference or seminar of a national, regional, or specialty medical or other professional association if the recipient of the scholarship or other support is selected by the association, (vi) rebates and discounts for prescribed products provided in the normal course of business.  Certain items are not prohibited and are considered “allowable expenditures.”  These include (i) certain limited sponsorship of a significant educational, medical, scientific, or policy-making conference or seminar, (ii) certain limited honoraria and payment of the expenses of a health care professional who serves on the faculty at a bona fide significant educational, medical, scientific, or policy-making conference or seminar, (iii) bona fide clinical trial arrangements, (vi) certain limited bona fide research projects, (v) expenses relating to technical training of individual health care professionals on the use of a medical device pursuant to a written agreement.

Manufactuers need to report “any allowable expenditure or gift … to any health care provider” or “to an academic institution or to a professional, educational, or patient organization representing or serving health care providers or consumers” in the following categories:

• “The loan of a medical device for a short-term trial period, not to exceed 90 days, to permit evaluation of a medical device by a health care provider or patient.”

• “The provision of reasonable quantities of medical device demonstration or evaluation units to a health care provider to assess the appropriate use and function of the product and determine whether and when to use or recommend the product in the future.”

• “The provision, distribution, dissemination, or receipt of peer-reviewed academic, scientific, or clinical articles or journals and other items that serve a genuine educational function provided to a health care provider for the benefit of patients.”

• “Scholarship or other support for medical students, residents, and fellows to attend a significant educational, scientific, or policy-making conference or seminar of a national, regional, or specialty medical or other professional association if the recipient of the scholarship or other support is selected by the association.”

• “Labels approved by the federal Food and Drug Administration for prescribed products.”

Manufacturers must report, on form specified by the attorney general, the value, nature, and purpose of each allowable expenditure, and permitted gift along with (i) the name of the recipient, (ii) the recipient’s address, (iii) the recipient’s institutional affiliation, (iv) prescribed product or products being marketed, if any; and (v) the recipient’s state board number.

Failure to manufacturer of prescribed products that fails to disclose as required by the law subjects the manufacturer to a civil penalty of no more than $10,000.00 per violation. Each unlawful failure to disclose, however, constitutes a separate violation.

The legislation also directs the attorney general’s office to conduct a review, in consultation with the commission on health care reform, of the advisability of modifying the law to require the disclosure of information about the provision of pharmaceutical samples to health care providers.   At present, samples are expressly excluded from the reporting regime.

If signed into law, the law will take effect July 1, 2009, but reporting activities under new regime will be implemented in 2010 reporting period.

Clearly the legislature had cost on its mind in enacting the law, as it also has tasked a state workgroup to explore generic alternative formularie recommendationss.   The workgroup is to report to the legislature by January 15, 2010 on the list generated.

Filed under: AKS, Conflicts of Interest, Health Law, AKS, CMP, Conflicts of Interest, LinkedIn, Pharma

Continuing 1Q Drops In GDP and Increasing Effects in Healthcare Sector

I recently posted on a WSJ article and Reuter’s research paper on the effect of the current recession on hospitals and the healthcare system job growth.   The AHA recently surveyed over 1,000 community hospitals (of the nearly 5,000 to which they sent surveys) seeking information on the recession’s effect on the hospital sector.   Similar to the Reuter’s paper from last month, the AHA’s survey shows significant effects on hospital total margins, operating margins, efforts to reduce costs, capital plans.

Healthcare tends to be recession resistant industry, but “The Great Recession” seems to be taking its toll.  And 1Q 2009 reports of economic contraction is worse then expected.   The Department of Commerce in a report issued this morning said that real GDP decreased at a remarkable annual rate of 6.1% Q1 2009.  In Q4 2008, real GDP decreased 6.3% and .5% in 3Q 2008.   Many economists had expected a 4.7% decline in GDP for the Q1 2009.  This is the worst two quarters in more than 60 years.  Since 1947, the economy “had never contracted by more than 4% for two consecutive quarters,” according to MarketWatch.com.  Three consecutive quarter losses has not occured since 1975.

Of note from the AHA survey summary of hospitals:

• 90 % have taken steps to reduce costs
• 80 % have reduced administrative expenses
• 48 % have reduced staff
• 20 % have reduced services in subsidized service areas
• 58 % have had at least a moderate increase in uninsured ER visits
• 70 % have had at lease a moderate increase in uninsured/Medicaid
• 59 % report at least a moderate decrease in electives
• 55 % report at least a moderate decrease in admissions
• 65 % report at least a moderate decrease in total margin
• 39 % report a significant decrease in total margin
• 57 % report at least a moderate decrease in operating margin
• 43 % expect a negative total margin 1Q 2009 (vs. 26% 1Q 2008)
• 59 % report a at least a moderate decrease days cash on hand
• 77 % are reducing capital spending
• 46 % are scaling back established programs for capital spending
• 54 % have discontinued planned (not started) capital projects
• 65 % have seen increase in physicians seeking “financial support”
• Of these 79% for call or other services; 71% seeking employment

via AHA : Press Release : Economic Downturn Taking Toll on Patients and Communities Hospitals Serve: New Survey Finds.

Filed under: Health Law, Economics, Health, LinkedIn, The Great Recession

The Human Analog to a Pet or a Public Resource?

Uwe Reinhardt has a piece on the Economix blog arguing for universal coverage and public financing of children’s health insurance through age 22.  Dr. Reinhardt is a professor of economics at Princeton University and a leading health policy expert.

What’s most notable about his post is his provocative start.  He asks the question:  do we in the United States view children as the “human analogs of pets … or…, as most European and Asians, as precious national treasures.”  Kind of  a disturbing question, when you think about it.  What’s he getting at?

He believes that answering this question “informs the nation’s health policy.”

If …the human analog of their parents’ pets, then … children’s health care is primarily the parents’ financial responsibility [and]…it is just and proper that, of two households with identical incomes, the one with children will have substantially less discretionary income …than does the childless household.  [I]f …national treasures — and the nation’s economic future — then …health care of children [is] the financial responsibility of society as a whole, just as is the financing of public elementary and secondary education.

Aside from remarking about S-chip and the 9 million children that are estimated to be uninsured, he also observes that Americans “seem to impute different social values to the health care of children, depending on their socioeconomic status, even if they have insurance.”  In other words, there can be a hundred dollar or more swing in basic primary care reimbursement depending whether a child is insured through private payors or public public programs.  And this price signal has real effects – many physicians, including many in Reinhardt’s New Jersey, will simply refuse to see Medicaid patients.

He then goes on to argue that a system similar to our public school system — but with vouchers for parents who would opt out of the public system — should be established for all American children under 22:

The purchasing function under this public program, that is organizing and managing care, could be delegated to private for-profit or nonprofit insurers, as in Medicaid Managed Care. Private insurers would then compete over the quality of their disease-management programs, not through judicious risk selection…[T]he fees paid providers under the public program would be set equal to the average of fees paid by the largest two or three private insurers in the state, lest the professional work of physicians caring for poor children continue to be relatively undervalued.

I think this is interesting reading in light of the McKinsey Study that I posted on recently.  If suboptimal health care is a contributing factor to sub-standard educational attainment of differing racial groups or social/economic classes in the United States, how much does our current health care financing system contribute?  How much, if any, lost GDP opportunity are we leaving on the table due to suboptimal financing of health care for children K-12?   If, as Dr. Reinhardt argues, health care for this cohort should be a public good, what’s the real GDP return on investment to Dr. Reinhardt’s program?  To me, asking and answering these questions are critically important to advance the policy debate.

via Seriously, What Is a Child? – Economix Blog – NYTimes.com.

Filed under: Bioethics, Health Law, Reform, Health, Health Law, Health Reform, LinkedIn

How Might The Education and Healthcare Sectors Be (Economically) Alike?

Thomas Friedman had an interesting op ed today.  He cited a recent McKinsey Study entitled The Economic Impact of the Achievement Gap in America’s Schools.   I read his op ed, but thought to take a look at the summary of the McKinsey Study.  It points out the potential for huge future improvement opportunity in the educational sector, if only that current opportunity may have been lost.  It also discusses an important similarity between the education sector and the health care sector that is worth remark.

Before briefly discussing the McKinsey study, it uses a report, made a generation ago, “A Nation at Risk”, as a springboard.  I just revisited that report this evening.  I recall reading it in an undergraduate education (elective) class a long time ago.  That 1983 report (by the National Commission on Excellence in Education presented to Secretary of Education) began:

Our Nation is at risk. Our once unchallenged preeminence in commerce, industry, science, and technological innovation is being overtaken by competitors throughout the world… History is not kind to idlers. The time is long past when American’s destiny was assured simply by an abundance of natural resources and inexhaustible human enthusiasm…We compete with them for international standing and markets, not only with products but also with the ideas of our laboratories and neighborhood workshops. America’s position in the world may once have been reasonably secure with only a few exceptionally well-trained men and women. It is no longer.

This McKinsey study asks the question: if we had effectively acted in 1983 and closed the international, racial and class/economic gaps in US k-12 educuation, where would we be today?  They stay away from the ‘moral’ and ‘equity’ component of fulfillment of some of the aspects of that old report’s recommendations and keep it at the level of national economic productivity.  The answer is that if we had done better, we’d be, as a society, a lot richer.

We’re now in the midst of the greatest economic downturn in generations.  Economists thinks that the current ‘Great Recession’ has depressed economic output of the United States by somewhere between $1T to $2T.  If the McKinsey study analysis is to be believed, however, we are experiencing staggering lost opportunities in gross national product performance that surpass even those numbers.  The study puts it this way:

[T]he international achievement gap is imposing on the US economy an invisible yet recurring economic loss [of $1.2T to $2.3T per year] that is greater than the output shortfall in what has been called the worst economic crisis since the Great Depression. In addition, the racial [gap of between $310B to $525B per year], income [gap of $400B to $670B per year], and system achievement gap[] [of $425B to $700B] all impose annual output shortfalls that are greater than what the nation experienced in the recession of 1981–82, the deepest downturn in the postwar period until now. In other words, the educational achievement gaps in the United States have created the equivalent of a permanent, deep recession in terms of the gap between actual and potential output in the economy.

Fundamentally,  our society is experiencing lost opportunity and it affects all of us in very real objective ways.  But lost opportunity is opportunity that can be regained.  So, where is this opportunity?  The healthcare sector and the education sector share an important and remarkable trait according to the McKinsey study authors.  As the McKinsey article points out:

The most striking, poorly understood, and ultimately hopeful fact about the educational achievement gaps in the United States involves the huge differences in performance found between school systems, especially between systems serving similar students. This situation is analogous to that found across American health care, where, as researchers like John Wennberg have shown, wide regional variations in costs and utilization of procedures and services exist that bear no relation to quality or health outcomes. In each case, these differences prove there are substantial opportunities to improve…

While at the racial and economic level there are sizable differences in attainment — controlling for these demographic differences one still finds amazing variations in student achievement.   The study authors point out that research shows that these variations “exist at every level in American education: among states, among districts within states, among schools within districts, and among classrooms within schools.”   “Intuition” and “research” suggest that differences in “public policies, systemwide strategies, school site leadership, teaching practice, and perhaps other systemic investments can fundamentally influence student achievement.”

The authors also point out that there seem to be gross inefficiencies in the educational sector.   While they do not extend, by analogy, to the health care sector, I’ve seen other studies that could.  Despite the United State’s very significant per capita education spending, we might have one of the least cost-effective educational systems in the world. The study authors report that by “one measure we get 60 percent less for our education dollars in terms of average test-score results than do other wealthy nations.”  In other words, as the chart from the report shows, we spend more per student to obtain one point on the Program for International Student Assessment (PISA) Math test (2003 data) than any other nation.  We pay a lot to perform far less well than our international peers.

While the authors do not make very specific recommendations regarding reform, ultimately, their main forward looking conclusion can be summed up by the Lord Kelvin observation:  ‘if you cannot measure it, you cannot improve it.’  The corollary — if you can measure it, and use “relentless efforts to benchmark and implement what works[,]” performance can be significantly improved.

This is an interesting and sober read and I recommend it.

Filed under: Comparative Effectiveness Rearch, Health Law, Personal Posts, Economics, Education, LinkedIn, The Great Recess

The Public and the Health Care Delivery System

The Kaiser Family Foundation, NPR and the Harvard School of Public Health recently conducted a poll of public attitudes concerning EHR, coordination of care, patient and doctor interaction around effectiveness and cost, the cost of care, the role of government and insurers in cost and comparative effectiveness, the uninsured and cost.  I found a few of the findings from the survey of note.

• A larger portion of respondents (34%) thought that EHR’s would actually increase costs of healthcare in America than decrease (22%) it.  Even more (39%) thought it would increase their own family’s healthcare costs!

• There is significant concern about unauthorized access (76%) to online medical records.

• A significant minority (40%) of Americans report at least minor problems with coordinating care between their different doctors, while half say this is not a problem at all. A smaller minority (17%) say they experience “major problems” coordinating their health care services.   Interesting, those Americans who reported having personally experienced at least three ‘coordination of care’ issues are much more likely (63%) to see overtreatment in the system as a whole compared to other Americans (48%).

• About half (49%) think that overutilization is a major problem.  Of course, only a minority (16%) say that they have received unnecessary care and a bit more than half (56%) think that insurance companies should have to cover expensive treatments even if they have not been proven more effective than other, less expensive options.

• A significant majority of Americans  (72%) believe that there is not always clear scientific evidence about which treatment is likely to work best for any one patient.  But only a small minority (9%) say that they have received an expensive medical test or treatment in which a less expensive alternative would have been just as good.

• A significant majority of Americans (65%) say their doctor’s charges are reasonable and (63%) believe that their doctor is working to keep the cost of their health care down.

• There is a significant disconnect between the actual cost of insurance and what uninsured Americans are willing to spend for insurance.  Majorities report being willing to pay $25, $50 or even $100 per month for coverage, but only a minority (29%) would pay $200 per month, and only a very small minority (6%) say they would pay $400.  (Nationwide, annual premiums averaged $2,613 for single coverage and $5,799 for family plans in the 2006-2007 period).

The WSJ Health Blog commented on this survey: while patient seem to recognize that there is waste in the system, it wasn’t their physician.  She’s perfect.

Filed under: Comparative Effectiveness Rearch, Health Law, Reform, Economics, Health, LinkedIn

Factors Influencing Physicians Prescribing NAIDs

In his Healthcare Economist blog, Jason Shafrin, Ph.D. (just recieved – congrats) reported on a recent study in The American Journal of Managed Care concerning the prescribing habits of Nonsteroidal Anti-Inflammatory Drug (NAIDs) among physicians.  The study, entitled Pharmaceutical Company Influence on Nonsteroidal Anti-Inflammatory Drug Prescribing Behaviors, describes, through interviews with academic medical center physicians from a variety of specialities, their prescribing habits in order to elicit the general themes that influence their behavior.  As Jason summarizes from the article, they are mostly influenced by the following:

1. Direct Marketing by pharma detailers.
2. Patient requests for medication, often driven by direct-to-consumer pharmaceutical advertising.
3. Habits formed during medical school. Often, these habits are influenced by drug rep visits while the physician was in medical school.
4. Journals, electronic peer-reviewed literature, and professional meetings.
5. Local physician expert opinion and practice guidelines.
6. The physician’s own experience prescribing drugs to patients.

The purpose of the study was to “describe the taxonomy of methods used by pharmaceutical companies to influence physicians’ nonsteroidal anti-inflammatory drug (NSAID) prescribing behaviors and to elicit physicians’ perceptions of and counterbalances to these influences” since there was a recognized poor adherence to prescribing guidelines for NSAIDs.  The study recognized that physicians describe detailing and direct contact with pharmaceutical representatives, requests from patients inspired by direct-to-consumer advertisements, and marketing during medical school and residency training as primary influences.  The study also reports that physicians described practice guidelines, peer-reviewed evidence, and opinions of local physician experts as important counterweights to pharmaceutical company influence.

The study concludes that the “social and communicative strategies used by pharmaceutical companies can be adapted to improve physicians’ adoption of guidelines for safer NSAID prescribing. Communicative interactions between local experts and other physicians who prescribe NSAIDs may be the critical target for future interventions to promote safer NSAID prescribing.”

Aanand D. Naik, MD and Aaron L. Woofter, MD et al,  (2009) “Pharmaceutical Company Influence on Nonsteroidal Anti-Inflammatory Drug Prescribing Behaviors,” Am J Manag Care. 2009 (published online April 1, 2009 and found online April 18, 2009 at http://www.ajmc.com/web-exclusives/managed-care/AJMC_09Apr_Naik_Exclusiv_e9toe15?utm_source=Listrak&utm_medium=Email&utm_term=%2fweb-exclusives%2fmanaged-care%2fAJMC_09Apr_Naik_Exclusiv_e9toe15&utm_content=jshafrin%40ucsd.edu&utm_campaign=AJMC+e-Table+of+Contents+(April+Web+Exclusive)).

via [AJMC] – American Journal of Managed Care.

Filed under: AKS, Conflicts of Interest, Drug Policy, Health Law, Pharmacy, Conflicts of Interest, Health Law, LinkedIn

HHS issues guidance on safeguarding PHI

On Friday, April 18, 2009, the Department of Health and Human Services released its guidance on protecting personally identifiable healthcare information by encrypting or destroying it so that it is rendered “unusable, unreadable or indecipherable to unauthorized individuals.”  (See http://www.hhs.gov/ocr/privacy/hipaa/understanding/coveredentities/hitechrfi.pdf).

Because the breach notification requirements of the HITECH Act apply only to breaches of unsecured PHI, the Department’s guidance provides the means by which covered entities and their business associates are to determine whether a breach has occurred to which the notification obligations under the Act and its implementing regulations apply.   Recall that under the HITECH Act, if there is a “breach” of  “unsecured PHR identifiable information” as personal health record (PHR) identifiable health information that is not protected through the use of a technology or methodology specified in the Secretary’s guidance (this document), and the “breach” is not qualified as provided in the HITECH Act, then certain disclosures by the covered entity are required.  These would include direct certified mail disclosure to individuals, “in cases in which there is insufficient or out-of-date contact information, substitute notice, including, in the case of 10 or more individuals for which there is insufficient contact information, conspicuous posting (for a period determined by the Secretary) on the home page of the Web site of the covered entity” and in cases of 500 or more records notice to prominent media outlets within the State or jurisdiction and immediately to the Department.   Notice by covered entities to HHS of all breaches is also required on an annual basis.  The Secretary will also post to its web-site notice concerning all disclosed breaches of 500 patient records or more.

[W]e have identified two methods for rendering PHI unusable, unreadable, or indecipherable to unauthorized individuals: encryption and destruction *** Protected health information (PHI) is rendered unusable, unreadable, or indecipherable to unauthorized individuals only if one or more of the following applies:

a) Electronic PHI has been encrypted as specified in the HIPAA Security Rule by “the use of an algorithmic process to transform data into a form in which there is a low probability of assigning meaning without use of a confidential process or key”15 and such confidential process or key that might enable decryption has not been breached. Encryption processes identified below have been tested by the National Institute of Standards and Technology (NIST) and judged to meet this standard.

i) Valid encryption processes for data at rest are consistent with NIST Special Publication 800-111, Guide to Storage Encryption Technologies for End User Devices.17

ii) Valid encryption processes for data in motion are those that comply with the requirements of Federal Information Processing Standards (FIPS) 140-2. These include, as appropriate, standards described in NIST Special Publications 800-52, Guidelines for the Selection and Use of Transport Layer Security (TLS) Implementations; 800-77, Guide to IPsec VPNs; or 800-113, Guide to SSL VPNs, and may include others which are FIPS 140-2 validated.

b) The media on which the PHI is stored or recorded has been destroyed in one of the following ways:

i) Paper, film, or other hard copy media have been shredded or destroyed such that the PHI cannot be read or otherwise cannot be reconstructed.

ii) Electronic media have been cleared, purged, or destroyed consistent with NIST Special Publication 800-88, Guidelines for Media Sanitization,19 such that the PHI cannot be retrieved.

The Department indicates that its list is an exhaustive list, but it opens discussion of other methods to make PHI unusuable, unreadable, or indecipherable.  In the development of this guidance, the Department reported that it had considered whether PHI in limited data set form should be treated as unusable, unreadable, or indecipherable to unauthorized individuals for purposes of breach notification.  It does not, but suggests that in the future, based upon additional comments and analysis, further restrictions on Limited Data Sets (e.g., removal of some of the digits of ZIP code) might effectively make re-identification such a remote possibility that the more limited data set would be unusable, unreadable, or indecipherable.  The Department also ask for comment on use of fingerprint protected Universal Serial Bus (USB) drives, for example, or whether it should, in providing future guidance on this topic, identify specific “off-the-shelf” products that may “meet the encryption standards identified in this guidance.”

In advance of its guidance to be issued on its interim final regulations on breach notifications, it also asks for comments.  The request for comments seems to indicate that the Department is concerned about need for covered entities to send multiple notices due to inconsistency between federal and state legal requirements.  They also are seeking examples of situations that covered entities think that the exceptions under the HITECH act will actually apply (perhaps to agree, disagree or to use in their own illustrative examples).

1.  Based on experience in complying with state breach notification laws, are there any potential areas of conflict or other issues the Department should consider in promulgating the federal breach notification requirements?
2.  Given current obligations under state breach notification laws, do covered entities or business associates anticipate having to send multiple notices to an individual upon discovery of a single breach? Are there circumstances in which the required federal notice would not also satisfy any notice obligations under the state law?
3.  Considering the methodologies discussed in the guidance, are there any circumstances in which a covered entity or business associate would still be required to notify individuals under state laws of a breach of information that has been rendered secured based on federal requirements?
4. The Act’s definition of “breach” provides for a variety of exceptions. To what particular types of circumstances do entities anticipate these exceptions applying?

Filed under: Health Law, HIPAA, Health, Health Law, HIPPA, LinkedIn

Recession Now Hits Jobs in Health Care

In the April 12, 2009 WSJ, they report on healthcare sector softening as the recession lingers.   The article mentions cuts at Mayo, Akron General and others.  Also quotes Paul Levy from Beth Israel Deaconness in Boston (author of Running a Hospital blog earlier posted about concerning their transparent efforts at saving costs):

More than 16 million people — one in eight workers on U.S. payrolls — work in health care today, up from just 1% of the work force 50 years ago…Employment in health care and social assistance — which includes hospitals, doctors offices, nursing homes and social services such as day care — has grown by half a million jobs since the recession began in December 2007, while the rest of the economy has shed 5.1 million jobs…But the pace of job growth in health services has slowed sharply this year. The sector added an average of 17,000 jobs per month in the first three months of the year, less than half last year’s pace…Since1958, there have been nine recessions, but employment in health services has declined only a handful of times…The only significant losses to date occurred in mid-1984, as the industry shed 41,000 jobs…Since then, no month has seen a drop of more than 4,000 jobs in health care, and there have been no back-to-back declines…The decline, while unusual, is still likely to be a temporary break in the industry pattern. Growth in health-care spending, and thus employment in the sector, is likely to rebound when the recession ends, a function of the enormous advances in medical technology and Americans’ strong appetite for health care… “It’s a long-term shift reflecting changes in technology and what consumers want,” says Robert Fogel, a Nobel laureate and professor at the University of Chicago’s Booth School of Business. “Health care is the growth industry of the 21st century.”

via Recession Now Hits Jobs in Health Care – WSJ.com.

Compare to an earlier analysis of the state of US Hospitals and the Current Recession.  Hospitals may be recession resistant; but are by no means recession proof:

“Observed impacts that appear related to the recession:

• Hospital non-operating and total margins have decreased dramatically, especially in the third quarter of 2008. Total margins are at historically unprecedented lows.

• Approximately 50% of hospitals are operating in the red.

• Hospital days-cash-on-hand has deceased significantly, following a pre-recession trend.

• Restricted investment assets have shrunk substantially for major teaching hospitals. These are non-realized losses that are not reflected in total margins declines.

• Hospital reimbursement rate increases appear to be shrinking — with possible negative impacts on net patient revenue in 2009.

• Total inpatient admission volumes may be falling below expectation.

Filed under: Health Law, Reform, Economics, Health, LinkedIn, The Great Recession

PartnersHealthCare Announces Industry Relationship Policy

The WSJ Health Blog in its April 10, 2009 posting reported that Parterns Healthcare, which includes Harvard-affiliated Mass General, had issued a report recommending tighter restrictions on industry relationships with its physicians.

The news release by Partners listed key recommendations from its report:

Prohibition of all gifts, including meals and funding for meals, provided directly to staff by industry for their personal use, on a Partners site or off site. This ban also applies to Partners institutions accepting industry gifts for this purpose.

Development of mechanisms to have free drug samples distributed only through the hospital pharmacy or some other centralized system, and not provided directly to or distributed by physicians.

Requiring that industry representatives have written invitations defining the purpose and terms of visits before having access to Partners sites and staff.

Establishment of a process to identify and manage significant financial interests held by physicians in companies that make products they prescribe or use in their practices.

Acceptance of industry funding for educational programs and fellowships only if provided through a centrally pooled institutional President’s Fund at each hospital or approved by a newly-created, Partners-wide Educational Review Board.

Establishment of a robust, tiered approach to evaluate research-related conflicts of interest, including continued prohibition of certain high-risk circumstances.

Adoption of a stricter policy holding certain officials to a higher standard because of their influential positions within the organization.

Strengthened oversight of permitted outside activities, including a ban on faculty participation in industry speakers bureaus, an express prohibition on faculty being listed as authors on papers ghostwritten by others, and a more rigorous internal review process for certain outside activities.

Development of an enhanced infrastructure, including creation of a new Conflict of Interest Review Committee, responsible for education, oversight, and enforcement of Partners policies and practices in regard to industry interactions.

The system plans to adopt revised policies and procedures by October 1, 2009 and acknowledges that a significant training and education program will be necessary during the roll-out of these changes.  The 30 page report details the commissions charge, its process, its internal review, external factors and recommendations. The press release link is below.

CommissionPressRelease_PartnersHealthCare2009.pdf (application/pdf Object).

Filed under: Conflicts of Interest, Drug Policy, Fraud and Abuse, Health Law, Reform, Conflicts of Interest, Health, Health Law, LinkedIn

Johns Hopkins Bans Free Drug Samples, Gifts from Industry – Health Blog – WSJ

As reported in the April 8, 2009 WSJ Health Blog, John Hopkins is the latest to adopt a restrictive policy on ‘on interaction with industry.’  the new policy “bans free drug samples and says doctors can’t participate in consulting gigs in which they’re essentially paid for not doing anything…”  The ban “applies to Hopkins’s medical school, hospitals and clinics”.   It also “prohibits gifts, entertainment or food — regardless of value — from drug and medical device companies.”

As for consulting relationships, the policy says that payments that are “without commensurate associated duties are considered gifts and are prohibited.”

According to the Health Blog, Hopkins representatives do not “believe it has a problem with …’sham’ consulting arrangements, but they’ve been a subject of concern around the country.”  For there doctor’s sake, one would hope not since that might be a bit more problematic than a meal or gift, no?

From the policy:

[On Gifts:]To avoid the risk of conscious or subconscious bias in decision-making, it is the Johns Hopkins Medicine policy that faculty and staff, employees, students, trainees, and volunteers may not accept gifts or entertainment (see below for food and meals), regardless of value ***

[On Consulting Arrangements:] Consulting arrangements involving personal compensation without commensurate associated duties are considered gifts and are prohibited. Specific policies regarding outside consulting are set forth in the School of Medicine’s policy on conflict of commitment and in JHM organizations’ personnel policies. ***

[On Food/Meals]: With certain exceptions, outlined below, industry-supplied food and meals are considered personal gifts and will not be permitted and may not be accepted at any JHM member organization site, in connection with activity conducted under the auspices of or using the name of any JHM member organization or in the context of professional activity off-site. ***

[On Unrestricted Gifts to Instituti0n:] Through unrestricted gifts, industry generously supports the educational, research, and patient care missions of Johns Hopkins. Gifts must be made to the University or JHHS and deposited in a departmental account.  There may be no quid pro quo, nor any limitations nor conditions placed on gifts that are inconsistent with Fund for Johns Hopkins Medicine policies and applicable regulations.***

[On Samples:] The practice of accepting free pharmaceutical samples risks interference with one’s prescribing practices since industry representatives often provide the newest and most costly drugs. Therefore, free pharmaceutical samples and vouchers for free pharmaceutical samples may not be accepted.***

[On Access by Pharma Reps:] [A]ccess by pharmaceutical, medical testing and other industry representatives to individual physicians must be restricted to non-patient care areas. Access will be permitted only on invitation from a physician, nurse, pharmacist, respiratory therapist, or other professional healthcare staff member.***

[On Speaking Gigs:] Faculty members may speak at an industry-sponsored program only if the faculty member retains full control and authority over professional material the faculty member presents and does not allow such communications or presentations to be subject to prior approval by any commercial interest other than approval for the use of proprietary information.

via Johns Hopkins Bans Free Drug Samples, Gifts from Industry – Health Blog – WSJ.

Filed under: AKS, Compliance Programs, Conflicts of Interest, Health Law, Conflicts of Interest, Health Law, LinkedIn

The New Tarasoff? 6th Circuit OKs Hospital Suit Over Ax-Wielding Ex-Patient | ABA Journal – Law News Now

In Moses v. Providence Hospital and Medical Ctrs the Sixth Circuit federal court of appeals finds that the Emergency Medical Treatment and Active Labor Act (“EMTALA”), 42 U.S.C. § 1395dd gives hospitals a duty to third parties concerning patients that are admitted and then not appropriately treated and stabilized for a mental illness who later go on to harm the third party.  In Moses, a husband presents to the hospital emergency room with his wife, having severe headaches, muscle soreness, high blood pressure, vomiting, slurred speech, disorientation, hallucinations and delusions.  According to his wife he is demonstrating threatening behavior.  The man is clearly screened, although there is a dispute as to whether the physician involved concluded that the husband had an emergency medical condition.   He was admitted for testing and observation.  He was discharged four days later.  There is some evidence in the record that he was to be admitted to the psych unit, although other evidence suggest he had medically stabilized and desired to leave, although the wife was still afraid of him.  The husband, ten days after his discharge, killed his wife.

The defendant hospital’s case is dismissed in summary judgment at the district level.  The hospital contends that (1) the defendant lacked standing because only the individual patient who seeks treatment at the hospital has standing under EMTALA; and (2) that EMTALA imposes no further obligation on a hospital once the hospital has admitted a person as an inpatient.

The court, discounting some legislative history as not controling, and other judicial decisions that have held that relatives of individuals do not have standing, says that a plain reading of the statute requires that any individual who suffered an actual personal injury due to the EMTALA violation may bring a claim against the hospital.  Because this is a third party that suffered actual person injury by the hospital’s allged injury, the court did not think that Zeigler v. Elmore County Health Care Auth., 56 F. Supp. 2d 1324 (M.D. Ala. 1999) (looking to the legislative history of EMTALA, holding that a mother cannot maintain an EMTALA action for a violation related to her daughter’s medical condition) was on point.  The court acknowledges that “our interpretation of the civil enforcement provision may have consequences for hospitals that Congress may or may not have considered or intended. However, our duty is only to read the statute as it is written, as we have in our past analysis of EMTALA.”

The court also holds that the hospital’s obligations do not end upon admission of the patient as an inpatient.  This can be a thorny issue for hospital, but most hoped with the Centers for Medicare and Medicaid Services (“CMS”) new rules,  a hospital’s EMTALA obligations upon admitting an individual as an inpatient. 42 C.F.R. § 489.24(d)(2)(i).  The Moses court acknowledges that the rules state that “[i]f a hospital has screened an individual under paragraph (a) of this section and found the individual to have an emergency medical condition, and admits that individual as an inpatient in good faith in order to stabilize the emergency medical condition, the hospital has satisfied its special responsibilities under this section with respect to that individual.”  But the Moses court finds that this does not support the summary judgement because it was (1) enacted after the cause of action accruing in this case, and, more importantly (2) “[t]he CMS rule appears contrary to EMTALA’s plain language, which requires a hospital to ‘provide . . . for such further medical examination and such treatment as may be required to stabilize the medical condition[.]'”  The court pretty much lays down the gauntlet to hospitals: “a hospital may not release a patient with an emergency medical condition without first determining that the patient has actually stabilized, even if the hospital properly admitted the patient.”

This is a particularly remarkable case.  The allusions to the famous Tarasoff case may be overly broad — but I am sure there will be much more written about it.

Filed under: CMP, EMTALA, Health Law, EMTALA, Health Law, LinkedIn, Risk Management