Drug reimportation.

Here's a terrific audio report from Congressional Quarterly's Capitol Hill Bureau Chief Mary Agnes Carey on the status of the House and Senate reimportation bills, the prospects of anything coming out of this week's markup session, and the political angle on this issue in 2004. If you have trouble opening the audio file, here's a link to the transcript of this broadcast.

Blame the lawyers.

Today's on-line Wall Street Journal has the results of an interesting survey about Americans' concerns over health care quality (requires subscription). 

Public concern about medical, surgical and diagnostic errors is high and many Americans have doubts about the ability of medical institutions to prevent these types of errors, according to the latest WSJ Online/Harris Interactive health poll.

Sixty-three percent of those polled say they are "extremely concerned" or "very concerned" about medication errors, such as receiving the wrong medicine, that can take place in a hospital. And more than half of respondents are extremely or very concerned about surgical errors.

And the source of this problem?  According to Vice-President Cheney (as reported by Ceci Connolly in today's Washington Post, and brought to my attention by former student Jonathan Childers):

"This problem doesn't start in the waiting room," Cheney said in remarks released by the campaign. "It doesn't start in the operating room. The problem starts in the courtroom."

With lawsuits on the rise and multimillion-dollar awards making headlines, physicians and many Republicans say limiting damages is the solution to the broader challenges confronting the U.S. health system. In their analysis, capping damages will lead to lower malpractice premiums, which will reduce doctors' use of unnecessary tests and procedures, known as defensive medicine. Those improvements will result in better care at a lower cost, enabling more people to buy coverage, they say.

Here's the quote you will hear over and over again from the Administration between now and the November election: "When it comes to the legal crisis in American health care, the Kerry-Edwards ticket is on the side of personal-injury trial lawyers, and the Bush-Cheney ticket is on the side of doctors and patients." Easy on the ears, easy on the brain. Sure beats having an actual plan to deal with this country's health care problems, doesn't it?

Class actions suits against non-profit hospitals.

Julie Appleby has a review piece in today's USA Today. From the sidebar:

• Several high-profile law firms have filed 31 cases against non-profit hospitals and hospital chains since late June. The cases make similar allegations, including: Some hospitals violate an implicit contract with the government to provide charity care in exchange for tax-exempt status by charging uninsured patients more than the insured or aggressively pursuing debts from low-income patients.
• Some facilities have large cash reserves they should use to provide charity care.
• They allow for-profit entities, such as doctor groups, to use their facilities to earn a profit.
• Hospitals named include the Cleveland Clinic; New York-Presbyterian; Sutter Health in Sacramento; Advocate Health Care Network in Chicago; Phoebe Putney Health Systems in Albany, Ga.; Baptist Health Systems in Alabama; and Catholic Healthcare Partners in Cincinnati.

The article offers some quotations I haven't seen in previous reporting:

Patient advocates, who were the first to publicize some of the concerns now included in Scruggs' cases, have mixed thoughts on the lawsuits. "This is a huge wake-up call," says Claudia Lennhoff of the Champaign County Health Care Consumers group in Illinois.

They also worry about the financial effect of the cases on non-profits.

"Having more scrutiny of billing practices is a good thing, but the risk is we're not taking on big tobacco, we're taking on a vital service," says Mark Rukavina of the Access Project, a national resource center that works with local groups on health care issues. "It's an industry I want to preserve, not bring down."

Some health law attorneys are skeptical that Scruggs' arguments will succeed.

"The behaviors they're targeting (billing and collection practices against the uninsured) are atrocious in some circumstances, but they're not illegal," says Gregg Bloche, a law professor of health law at Georgetown University. "The suits will fail."

Nor do they think there is an implied contract between hospitals and the government.

"That's never been recognized in the law," says Stuart Gerson, a partner at Epstein Becker & Green in Washington, D.C., who represents a hospital being sued. "The idea of an individual citizen, a taxpayer, seeking to enforce charitable obligations is, at least, a very novel argument that finds little support."

If any laws are being broken by the common hospital practice of allowing for-profit doctors to use their facilities, or if facilities are improperly steering business to trustees' companies, those arguments should be heard by taxing authorities or federal and state antitrust or anti-kickback regulators, Gerson says.

The lawsuits are renewing debate over the legal and ethical responsibility the nation's non-profits have to provide charity care.

"The IRS has never been really clear about what the grant of tax-exempt status means," says attorney John Reiss of the law firm Saul Ewing in Philadelphia. "It's never been clear that it actually commits you to providing any particular amount of charity care or anything else."

Non-profit hospitals say they provide a variety of charitable services. Hospitals have different ways of classifying such care, with some saying charity is providing medical services to anyone who walks in the ER, regardless of their ability to pay.

Others consider write-offs for bad debt charity care or financing community services, such as supporting health clinics.

More on designer babies.

The Sunday Independent (U.K.) has a report in today's issue:

A two-year-old boy who needs urgent treatment to cure a rare and potentially fatal blood disorder is at the centre of a fresh row over creating "designer babies" with human embryos.

The Human Fertility and Embryology Authority (HFEA) is poised to relax its rules on using genetic screening for medical treatments on Wednesday. The decision will have profound consequences for the life of Joshua Fletcher and children like him.

Joshua suffers from a rare genetic defect called Diamond-Blackfan anaemia, one requiring regular blood transfusions. His parents, Joe and Julie Fletcher, from County Antrim, Northern Ireland, have asked the HFEA to permit the genetic selection of a healthy sibling to help cure him by using that baby to donate healthy stem cells.

The present HFEA rule prevents parents selecting embryos solely because that child will have desirable characteristics, even if they will save another life - the central issue in Joshua's case.

Two years ago, the HFEA was heavily criticised for rejecting a similar bid by the family of Charlie Whitaker, who suffered from the same disorder. His parents instead flew to Chicago for fertility treatment, and had a genetically matched son. . . .

The HFEA's possible relaxation of the rules in this field is already stirring up opposition:

At present, embryos can only be screened before implantation using a technique called pre-implantation genetic diagnosis if there is a significant risk that the baby will itself be born with a critical or extremely serious genetic condition. Using that child to then treat another child is currently seen by the HFEA as a secondary benefit of the technique.

The proposal, which follows an HFEA rule review, has already provoked a fierce controversy over the religious and medical ethics of creating "made to order" babies simply to save another child's life. Critics claim embryo selection could easily lead to parents selecting babies because of their hair colour, gender or intelligence, and eventually to cloning.

Yesterday, a Christian think tank warned that an HFEA rule relaxation would be instantly challenged in the courts. Roger Smith, of the Centre for Bioethics and Public Policy, said: "The law says the welfare and best interests of the child being born has to be their primary consideration - not creating one life for the sake of another. That seems to us to be outside ethical boundaries."

The HFEA is also under intense pressure from fertility experts, parents and medical charities to soften its regulations after rejecting earlier bids by other families with Diamond-Blackfan anaemia. One family flew to the United States for treatment. Three further families with children with Diamond-Blackfan anaemia are preparing bids to the HFEA.

An HFEA spokeswoman said the authority could either reject the Fletchers' proposal or seek further information before making a decision.

Conceiving a child to save another.

An article in today's Arizona Daily Star discusses the practice of conceiving a child in order to produce a donor (bone marrow, cord blood . . . ), which the editors describe as "deeply controversial." In and of itself, it's hard to see where the moral objection, or the argument for regulation, comes in. The article identifies a few problems, only one of which focuses on the decision to conceive for the benefit of another:

•  Dr. Michael Graham, director of pediatric bone-marrow transplantation at University Medical Center (in Phoenix): "The underlying principle of medical ethics is that no person can exist solely for somebody else's benefit. So I worried about creating a child specifically to create a donor."  The key word in this Kantian objection is solely, which posits that the utilitarian reason for having another child is the only reason, rather than one of many.  The fact that a child is born for reasons that benefit others (parents who want the additional companionship in older age, a sibling who would otherwise be an only-child) hardly seems like a reason not to conceive, as long as the child will be valued, loved, and protected in his or her own right.
• Of course, that last notion does give one pause, certainly when you hear about a family that plans to put the "donor baby" up for adoption after the donation has occurred (so far, a hypothetical concern only).  Dr. Graham "was especially concerned about a North Carolina mother with a diseased child who took fertility drugs to try to have a 'donor baby,' even though she was divorced. She had twins, but neither turned out to be a match.  'So here are two more children in a split and strained family,' he said."  True, but that North Carolina mom could have had babies for any reason, or no reason at all, with the same result.  The question is how paternalistic do we want to be.
• In vitro fertilization raises other issues, at least for the Catholic church and others who object to the creation of multiple embryos, followed by genetic screening to identify the best match, and destruction of the unused embryos.

Interestingly, "some ethicists have argued it might be morally wrong not to have a donor or designer baby, if possible, when another child's life is at stake.  'In a situation that requires an intervention involving no sacrifice and no inconvenience by one child in order to save the life of another child, (this) is morally acceptable. It may even be morally required,' Dr. Merle Spriggs, head of the Ethics Unit at Royal Children's Hospital in Victoria, Australia, wrote in a British medical journal."

Reimportation bill stalls in Senate.

Ruby L. Bailey wrote a good piece on reimportation in yesterday's Detroit Free Press (provided here courtest of the San Jose Mercury News). In particular, she provided a concise comparison of the competing Senate bills:

COMPARING THE BILLS

Two U.S. Senate bills would allow drug importation into the United States from Canada and other countries. How they compare: Pharmaceutical Market Access and Drug Safety Act (Democrat-sponsored) [S.2328] 1. The FDA has 90 days to create rules permitting drug importation. U.S. pharmacies and drug wholesalers can import medicines from Canada in the first year and 19 other countries thereafter. Individuals could be shipped prescriptions from mail order or Web sites from FDA-approved Canadian pharmacies. 2. It's unlawful for drugmakers to limit supply or alter drugs to fail FDA standards. 3. A 1 percent user fee is imposed to fund FDA inspections. 4. Exporters to individuals must post a bond that they forfeit if they send unsafe drugs.

Safe Importing of Medical Products and RX Therapies Act (GOP-sponsored) [S.2493] 1. The FDA has one year to make safety recommendations before permitting imports from Canada and up to three years for 15 European Union countries. The FDA could ban drugs from some nations. 2. There is no provision making it unlawful to reduce supply or alter drugs to fail FDA standards. 3. A new, uncapped user fee program is established, paid for by all foreign and domestic businesses engaged in importation to pay for FDA inspections. 4. Licensing requirements and penalties are established for all online pharmacies that illegally conduct or solicit U.S. business.

Gary Hart: no joke.

Gary Hart.  Mention his name and you are bound to get a snicker.  Donna Rice . . . "Monkey Business" . . .  But consider this from tomorrow's review (in the N.Y. Times) of his new book, The Fourth Power:

Few Americans have more right to say ''I told you so'' than Gary Hart. During the 1990's, when the foreign policy establishment was obsessed with Star Wars and other issues left over from the cold war, Hart headed a commission on national security with another former senator, Warren Rudman. Its report, issued early in 2001, warned of catastrophic terrorist attacks in which ''Americans will likely die on American soil, possibly in large numbers.'' Incredibly, the work of the Hart-Rudman commission was widely ignored by the press and the Bush administration.

''The Fourth Power'' builds on the many ideas of the commission, offering sweeping recommendations for how America should orient its foreign policy in the 21st century. Hart's timely central argument -- an alternative to both the neoimperialist impulses of the Bush administration and the creeping Kissingerian realism of the Kerry campaign -- is that the traditional military, political and economic powers of American foreign policy should be constrained by and imbued with a fourth power, America's unique principles. To those who advocate a crusading foreign policy of preemption to ''rid the world of evil'' and spread democracy -- even at the point of a gun -- Hart argues that the first casualty would often be America's moral authority: ''There is a vast difference between advocating, as I do, that America live up to its own principles and advocating, as the Bush administration does, that the rest of the world live up to America's principles.'' At the same time, Hart counters Kerry's retreat to a Kissinger-style foreign policy, based largely on America's interests, with a humble but still idealistic internationalism, with the spread of liberal democracy at its core. It's a call for nation building without Abu Ghraib.

In 1993, Hart sent President Clinton a memo arguing that the end of the cold war was the ideal occasion to reorient the military ''for new missions relating to hostage rescue, counterterrorism, low intensity conflict, guerrilla warfare and stabilization of new democracies.'' Much of this prescient document is reprinted as an appendix. We were told.

Readers respond to PAS column by Kristof.

As noted here recently, Nicholas Kristof wrote an op-ed piece lauding the Oregon Death With Dignity Act, which legalized physician-assisted suicide. Four readers respond in today's N.Y. Times. The responses range from the syllogistic (killing is wrong; suicide is a subset of killing; suicide is wrong) to the empathic. That latter category includes both sentiments both pro (PAS is a humane alternative to "the cruelty of a medical and legal system that requires keeping bodies going despite the wishes of suffering, hopelessly ill people") and con ("palliative care . . . is an invaluable alternative to euthanasia. Those with terminal illness need not end their own lives. Death with dignity is possible without hemlock"). Perhaps the least persuasive of the letters grounded its argument entirely in autonomy: "Terminally ill, competent adults should be allowed to die on their own terms." As an argument in favor of allowing patients who want to die to kill themselves, this argument works, but it's already legal in all 50 states to kill yourself. As an argument in favor of state-sanctioned and supported medicalized killing, autonomy falls flat. All but the most zealous proponents of patients' rights concede that autonomy has limits, which usually arise when a person's autonomous right to do X has consequences for others. Beating the autonomy drum for PAS fails to address the subtler problem of line-drawing that such a claim inevitably raises.

Assisted suicide and Ashcroft.

As previously noted here, John Ashcroft has tried to halt Oregon's "Death With Dignity" experiment by threatening action against any physician who participates in assisted suicide by writing a prescription for a drug that appears on the federal government's list of controlled substances. His legal theory appears to be that the exception allowing physicians to prescribe controlled substances within the practice of medicine allows the Attorney General to determine what constitutes the practice of medicine, and physician-assisted suicide doesn't fit his definition. A federal appeals court recently ruled that what constitutes "the practice of medicine" is something for the states to decide, not the Attorney General, and if Oregon says it includes PAS, then that's the end of the matter.

On Monday, Ashcroft's Justice Department sought reconsideration by the appellate court, which prompted a thoughtful op-ed piece by Nicholas D. Kristof in today's N.Y. Times. Even if you (like me) thought the Oregon law was a bad idea, this is worth reading. I admit that I've come around on this subject because of the Oregon experiment, and Kristof highlights important aspects of that experience quite well.

House votes to allow Canada drug imports.

The Associated Press is reporting (via Yahoo! News) that the House of Representatives voted 389-31 to approve a $16.8 billion appropriations bill for the Dep't of Agriculture and the FDA that includes a measure that would legalize prescription drug purchases from Canadian sources. That's the good news. The bad news: "The provision is not expected to remain in the final spending bill to be reconciled later by House and Senate negotiators, a Republican staff member said. . . . A nearly identical plan was passed by the House last year, only to be removed later in House-Senate negotiations."

Federal marriage amendment dies in Senate.

According to this afternoon's Washington Post web page, the federal marriage amendment died in the Senate this afternoon. Here's the link to the Senate's roll-call vote on the motion to close debate (which is how anything gets to a vote on the Senate floor - 60 votes are required, and this motion got only 48). Because 6 Republicans broke ranks and voted with all but 3 Democrats against cloture, it will be a little harder for the Administration to make this a big campaign issue in the fall than if all the Republicans stuck together and could complain that same-sex marriage is favored by "those Democrats":

The vote by the Republican-controlled Senate amounted to an embarrassing defeat for President Bush and conservative leaders who had pushed hard for approval of the amendment as a way of protecting traditional marriage. But Senate GOP leaders vowed to continue pushing for the amendment, hoping it will galvanize conservatives in the November election and help elect more supporters of the amendment.

"This issue is not going away," Majority Leader Bill Frist (R-Tenn.) said.

The World's Greatest Deliberative Body comes through again!

CMS: Lying to Congress.

Lying to Congress ought to get a person into a lot of trouble. Tom Scully, the former head of CMS, is poised to skate on the charge that he directed the head auditor of CMS to lie to Congress about the actual budget projections for last fall's Medicare reform proposal. Threatened with the loss of his job if he told Congress the truth, the auditor shaded his estimate by nearly 50% (or $150 billion), which kept the estimate under $400 billion, the previously announced upper limit for a key group of Republican Senators. (There are more details in previous posts to this blog: 7/7/04, 3/12/04, 5/1/04.) Although the OIG says no laws were broken by Scully's efforts to affirmatively mislead the Congress, and no job action can be taken against an ex-exmployee, an editorial in today's N.Y. Times concludes:

Regardless of the legal technicalities, it is a terrible policy to deprive legislators of information they need to make informed choices. Mr. Foster has said that he shared his estimates not only with Mr. Scully, but also with Doug Badger, President Bush's health policy adviser. Both Mr. Scully and Mr. Badger declined an invitation to appear before the House Ways and Means Committee in April. The committee should call both men again, under subpoena if necessary, to answer questions about what looks like a conspiracy to keep Congress in the dark.

Amen.

Physician recruitment on FBI's radar.

According to a talk given at a Blue Cross Blue Shield Association news conference, the FBI is focusing increased attention on hospitals' physician-recruitment deals, according to a news item (requires subscription) in today's "Daily Dose" from Modern Healthcare. Tim Delaney, head of the Bureau's healthcare fraud unit, also said the top areas of growing fraud are pharmaceutical and DME cases, with the largest number of hospital cases involving cost-reporting errors.

Nonprofits under scrutiny.

More on the legal woes of nonprofit hospitals under attack for their billing and collections practices with respect to unfunded patients: the cover story of the July issue of HealthLeaders magazine, "Aggressive Collections," by Philip Betbeze, provides an excellent overview of recent developments.

Late-term abortion law struck down again.

As reported in Friday's St. Louis Post-Dispatch, a federal judge has struck down Missouri's late-term (or "partial-birth") abortion law. The grounds for the decision are similar to those relied upon in June when the federal court in San Francisco declared the similar federal law to be unconstitutional: the absence of an exception to the prohibition to protect the life of the mother, a provision the Supreme Court said in Stenberg v. Carhart was constitutionally required. The opinion by Senior Judge Scott O. Wright of the District Court for the Western District of Missouri is not yet posted on the court's web site or on WestLaw.

Bush's marriage thing.

Bush 41 was famous for his desire to have "the vision thing." Bush 43 seems to have visions galore, including a "marriage vision." In this vision, gays aren't married and "welfare mothers" are. And just to make sure his marriage vision becomes a reality, the President favors a federal marriage amendment to nail down that first notion and is proposing to spend $200 million to achieve the second one. Guest columnist Barbara Ehrenreich (filling in for the book-writing Tom Friedman) skewers this vision nicely in an op-ed piece in today's N.Y. Times.

Science & politics redux.

Today's N.Y. Times has an article by Mireya Navarro ("Experts in Sex Field Say Conservatives Interfere With Health and Research") that sounds a familiar theme:

For years, Advocates for Youth, a Washington-based organization devoted to adolescent sexual health, says, it received government grants without much trouble. Then last year it was subjected to three federal reviews.

James Wagoner, the president of Advocates for Youth, said the reviews were prompted by concerns among some members of Congress that his group was using public funds to lobby against programs that promoted sexual abstinence before marriage. Although that was not the case, Mr. Wagoner said, the government officials made their point.

"For 20 years, it was about health and science, and now we have a political ideological approach," he said. "Never have we experienced a climate of intimidation and censorship as we have today."

Mr. Wagoner is among the professionals in sex-related fields who have started speaking out against what they say is growing interference from conservatives in and out of government with their work in research, education and disease prevention.

A result, these professionals say, has been reduced financing for some programs and an overall chilling effect on the field, with college professors avoiding certain topics in their human sexuality classes and researchers steering clear of terms like sex workers in the title of grant applications for fear of drawing attention to themselves.

"Programs almost have to hide what they do," said Richard Parker, a professor at the Mailman School of Public Health at Columbia University. "We have a major challenge ahead of ourselves."

Sound paranoid? It gets worse: "Professor Parker is also a co-chairman of the International Working Group on Sexuality and Social Policy, an association of researchers and other professionals, which released a report two weeks ago citing examples of what it called sex policing under the Bush administration. The report cited, for example, changes in factual information about sex education and H.I.V. transmission on government Web sites as well as questioning by members of Congress about research grants approved by the National Institutes of Health."

Stem cells and cloning.

The United States' failure to work out a comprehensive and comprehensible set of policies on stem cell research and human cloning is emblematic of a wider, international failure. In an excellent review piece in this week's issue of The Lancet, Carol A. Tauer (Univ. of Minn.) surveys the wreckage and suggests a new approach to forging a consensus.

Mixing science & politics (again).

In an editorial in this week's issue, the editors of the British medical journal The Lancet take the Bush Administration to task for its new policy by which DHHS'

Office of Global Public Health will choose which, if any, US Government scientists can serve as advisers to WHO. Instead of going directly to the experts they want as technical advisers, as WHO has done in the past, the organisation must now provide the Office of Global and Public Health, which is headed by a political appointee, with "terms of reference" for each proposed consultation--a process that it concedes "will require a minimum lead-time of 3 weeks". A written directive goes on to remind WHO that US Government employees are required "to serve as representatives of the US Government at all times and advocate US Government policies".

A spokesman for the HHS strongly denied charges that this newly resurrected policy represents any attempt by the Bush administration to exercise political control over the exchange of scientific information, describing it instead as a method "to create accountability" and to ensure that WHO works with appropriate experts. He said that agency heads have not always been aware of the consulting activities of their employees, and that no specific cases prompted the action.

The editors allow as how HHS' denials ring a little hollow in light of this administration's demonstrated willingness to shade the truth when science doesn't quite fit its political plans. I like the editors' suggestions for ways the Bushites can prove their sincerity:

But let us give the Bush administration the benefit of the doubt. If this move is meant to provide accountability, let us have some from HHS. First, to dispel any perception of divided loyalties, put a career civil servant, not a political appointee, in charge of the process. Then, to ensure proper public accountability, let HSS put on its website names of those consultants WHO asked for, whether HHS agreed with the requests or approved someone else, and the rationale for the decision. Finally, disclose all of the evidence: how long did the approval process take, and at what cost? The public, whom the administration claims to be protecting, can then decide whether this policy streamlines or obfuscates the process of global scientific consultation, and whether it is a good use of the government's time--and taxpayers' money. We would guess not.

2 new cases from Texas Supreme Court.

The Texas Supreme Court had a pretty heavy opinion day on Thursday and handed down a couple of cases of potential interest to health care providers. Providers prevailed in both actions, thus maintaining a winning streak in the Supreme Court that must stretch back years.

Utica National Insurance Co. of Texas v. American Indemnity Co., ___ S.W.3d ___ (Tex., No. 02-0090, July 9, 2004): majority opinion; dissenting opinion.
Mid-Cities Surgi-Center employed a scrub technician who stole fentanyl, an anesthetic, from the surgical center. Apparently using the same syringe, the technician removed fentanyl from the glass ampules in which it was stored, injected himself with the drug, then injected saline solution back into the ampules to hide his theft. He then re-sealed the ampules with super glue and re-wrapped them with cellophane to further hide his crime. Because the technician was infected with Hepatitis C, his use of a dirty syringe allegedly contaminated the ampules. A number of patients who received fentanyl injections, including the four plaintiffs in this lawsuit, subsequently tested positive for Hepatitis C. Plaintiffs sued Mid-Cities Anesthesiology, P.A., a professional association of ten doctors who practiced anesthesia at the surgical center, and the association's member anesthesiologists. The patients alleged numerous negligent actions against the doctors' association and its members, including negligence in "failing to properly secure anesthesia narcotics" and in "exposing patients to contaminated medication." The association's professional liability insurer originally assumed defense of the suit, but later became insolvent. The Texas Property and Casualty Insurance Guaranty Association (TPCIGA) then assumed its obligations.

TPCIGA tendered the suit for a defense and coverage to the Association's general liability insurer at the time of the litigation, American Indemnity, which denied coverage because it was not the insurer at the time the infections occurred. TPCIGA then tendered the suit to the Association's general liability insurer at the time the plaintiff's became infected, Utica National, which denied coverage based upon an exclusion in its policy for "[b]odily injury . . . due to rendering or failure to render any professional service." After TPCIGA and American Indemnity settled the claims, they brought suit against Utica National for defense and settlement costs. The trial court granted motions for summary judgment by TPCIGA and American Indemnity, holding that Utica National's exclusion for professional services did not preclude coverage and awarded judgment against the defendant for the defense costs and full settlement costs, with attorney's fees and pre- and post-judgment interest.  The Court of Appeals in Austin affirmed.

Held: Reversed in part and remanded. The policy excludes coverage only when the insured has breached the standard of care in rendering those professional services. In this case, the allegations in the pleadings raised both the possibility that the treating doctors were negligent in their administration of the drug and the possibility that the doctors' association was negligent in the storage of that drug. Because the plaintiffs alleged both professional and non-professional negligence, the general liability insurer had a duty to defend the underlying suit in this case under the eight-corners doctrine. But because a fact issue exists about whether the patients' injuries were caused at least in part by the doctors' rendition of professional services, in which event Utica National's policy would not cover the doctors' association, the Supreme Court remanded the indemnity claims to the trial court for further proceedings.

Justice Hecht dissented in an opinion joined by Justice Owen. The essence of his opinion is set out in the following passage: "I cannot see how it is remotely possible for a physician to be negligent in preserving the purity of medications administered to patients by himself and those with whom he associates and yet not be in breach of a professional standard of care. Thus, I would hold that the patients' claims were for professional liability, against which Utica had no obligation under its CGL policy to defend or indemnify. The Court does not foreclose this result but remands for fact findings. If I am correct C if the association and its members could not have been negligent without violating a professional standard of care C the outcome will eventually be the same."

Martinez v. Val Verde County Hospital District, ___ S.W.3d ___ (Tex., No. 03-0611, July 9, 2004): opinion.

Kaelyn Martinez, age 3, underwent a tonsillectomy at the Val Verde Regional Medical Center. Kaelyn’s parents, Marcus Martinez and Mary Koog, filed suit a little over two years after the operation, individually and on behalf of Kaelyn, against the Val Verde County Hospital District (which operates as the Medical Center) and others.  The Hospital District is a governmental unit immune from suit under the Texas Tort Claims Act, Tex. Civ. Rem. & Pract. Code § 101.001 et seq., but Martinez and Koog invoked the Act's exception for liability based upon the use of tangible property,
id. § 101.021(2).

The Act requires that a governmental unit receive notice of any claim against it within six months of the incident giving rise to the claim unless it already has actual notice. Id. § 101.101. The Hospital District first received notice of the claims of Kaelyn and her parents six months and twenty-two days after Kaelyn’s surgery, and Martinez and Koog did not contend that the Hospital District had actual notice before then. Accordingly, the Hospital District filed a plea to the jurisdiction, asserting that because it did not receive notice as
required by the Act, its immunity from suit was not waived, and the court lacked subject matter jurisdiction of the claims against it. The trial court sustained the plea and ordered the case dismissed with prejudice.

The parents argued (1) that the notice requirements of the Act are not jurisdictional and therefore the trial court had subject matter jurisdiction of their claims, and (2) that the notice provision of the Act should be tolled if the claimant is a minor, unless the statute clearly states that its time limits are not tolled during a claimant's minority. The court of appeals held that Kaelyn’s minority did not toll the six-month period for giving notice.  The court also ruled that notice is not a condition of the Act’s waiver of immunity that should be raised in a plea to the court's jurisdiction but instead is an affirmative defense that should be raised by motion for summary judgment. The court therefore reversed the trial court’s dismissal for want of jurisdiction and remanded the case for further proceedings.

Held: Affirmed. As to the appellants' tolling argument, the Supreme Court, per Justice Hecht, observed, "One can believe, as the court of appeals did, that it is unfair to require a minor who cannot sue to give the notice required by the Tort Claims Act, but the State is not required to waive immunity from suit at all. The fairness or wisdom of the waiver is not our province to decide."

French ban human cloning.

According to the International Herald-Tribune, France has banned human cloning (now punishable by up to 30 years in prison and a fine of over US$ 9 million). They also suspended their ban on stem cell research on human embryos for five years. AP reports (courtesy of the Seattle Post-Intelligencer) that the prison term is 20 years. It also says that the new bioethics law, originally introduced by the Socialist government almost 3 years ago, does not include a provision that would have made it legal for a widow to be impregnated with an embryo created when her husband was still alive.

Studies Look at Health Care in the U.S.

The N.Y. Times ran a short article in today's paper surveying some of the emerging theories, and the developing consensus, among health care economists. After reviewing the usual benchmarks that place the United States at or near the bottom of developed countries in health-care measure despite spending more, and more per capita, than the others, author Jeff Madrick, continues:

What may surprise readers, and certainly surprised this writer, is that Americans, by paying so much more, do not have many more services. In fact, according to recent research, they typically have fewer. Consider the number of doctors. In 2001, the United States had 2.7 doctors per 1,000 people, compared with a median of 3.1 in the countries in the Organization for Economic Cooperation and Development. France, accused of having a doctor shortage in last summer's heat wave, had 3.3 per 1,000.

Also, consider the number of hospital beds. The United States has only 2.9 hospital beds per 1,000 people, compared with the O.E.C.D. median of 3.9. Germany has 6.3. The United States is also behind in the actual days spent in a hospital and hospital admissions per capita. These are not necessarily bad in themselves, but the question is why we spend so much.

The reason for the high level of American spending, argue the researchers - Uwe E. Reinhardt of Princeton and Peter S. Hussey and Gerard F. Anderson of Johns Hopkins - is that American doctors and hospitals charge much more. Americans also usually pay significantly more for drugs, they say, and administration expenses are exorbitant.

OIG's statement re: Scully, the CMS chief auditor, and the price of Medicare reform.

The Acting Principal Deputy Inspector General's statement is on the OIG website. Chairman Grassley released a brief statement about the IG's report and posted it to the Senate Finance Committee's website. The IG's statement says the report has been forwarded to the Secretary of HHS, but so far there's nothing in that agency's web site about the report. The folks who should be really upset at this are the Republicans who relied on CMS' budget projections when they cast their votes in favor of Medicare last fall. Where's the noise?

Also, OIG may have concluded that Scully broke no laws, but apparently the nonpartisan Congressional Research Service concluded otherwise. At least, that's what Rep. Charlie Rangel said in a letter to the chairman of the House Ways and Means Committee, in which he quotes from the CRS report that he (Rangel) requested. So far, at least, the CRS report itself seems not to be available on the Web.

According to Rangel's letter, the laws in question are 5 U.S.C. § 7211, §§ 618 and 620 of P.L. 108-199 [NOTE: see 118 Stat. 354-55 (pp. 352-53 of 455)], 42 U.S.C. § 1317, and 5 U.S.C. § 2302(b)(8).

For a great summary of the issues, the responses, and the next steps for this controversy: Kaiser Family Foundation's Daily Health Policy Report.

Health Affairs' mega-med-mal issue.

The July/August issue of Health Affairs was released today, and it's a doozy: half the issue is devoted to observations, empirical studies, and prescriptions for what is universally described as a medical-malpractice crisis. Here are some of the highlights (from the free previews and abstracts on the journal's web site):

• The Forgotten Third: Liability Insurance And The Medical Malpractice Crisis, William M. Sage [Abstract]:
  Although the most visible manifestations of medical malpractice involve patient safety and the legal process, the availability and affordability of liability insurance largely determine the direction of medical malpractice policy. Scientific and industrial developments since the first modern malpractice crisis in the 1970s reveal major problems with the structure and regulation of liability insurance. Comprehensive reforms that approach medical malpractice insurance as a health policy problem are needed, and the Medicare program may have a major role to play.


• A Mediation Skills Model To Manage Disclosure Of Errors And Adverse Events To Patients, Carol B. Liebman and Chris Stern Hyman [Abstract]:
  In 2002 Pennsylvania became the first state to impose on hospitals a statutory duty to notify patients in writing of a serious event. If the disclosure conversations are carefully planned, properly executed, and responsive to patients’ needs, this new requirement creates possible benefits for both patient safety and litigation risk management. This paper describes a model for accomplishing these goals that encourages health care providers to communicate more effectively with patients following an adverse event or medical error, learn from mistakes, respond to the concerns of patients and families after an adverse event, and arrive at a fair and cost-effective resolution of valid claims.


• Improving The Medical Malpractice Litigation Process, Catherine T. Struve
  [Abstract]:
  Critics charge that judges and juries are incompetent to address medical liability issues. Some advocate shifting authority away from ordinary judges and juries, either by appointing "expert" decisionmakers, such as "medical screening panels" or specialized "medical courts," or by instituting caps on damages. Problems with the tort liability system may weigh in favor of a shift to a no-fault administrative compensation system. If the current fault-based system is retained, however, policymakers should not adopt half-measures by creating "expert" panels or "expert" courts. Rather, they should better equip the existing decisionmakers to deal with liability and damages questions.


• Caring For Patients In A Malpractice Crisis: Physician Satisfaction And Quality Of Care, Michelle M. Mello, David M. Studdert, Catherine M. DesRoches, Jordon Peugh, Kinga Zapert, Troyen A. Brennan, and William M. Sage [Abstract]:
  The rhetoric of malpractice reform is at fever pitch, but political advocacy does not necessarily reflect grassroots opinion. To determine whether the ongoing liability crisis has greatly reduced physicians’ professional satisfaction, we surveyed specialist physicians in Pennsylvania. We found widespread discontent among physicians practicing in high-liability environments, which seems to be compounded by other financial and administrative pressures. Opinion alone should not determine public policy, but physicians’ perceptions matter for two reasons. First, perceptions influence behavior with respect to practice environment and clinical decision making. Second, perceptions influence the physician-patient relationship and the interpersonal quality of care.


• Are Damages Caps Regressive? A Study Of Malpractice Jury Verdicts In California, David M. Studdert, Y. Tony Yang, and Michelle M. Mello [Abstract]:
  Caps on damages have emerged as the most controversial legislative response to the new malpractice crisis. We analyzed a sample of high-end jury verdicts in California that were subjected to the state’s $250,000 cap on noneconomic damages. We found strong evidence that the cap’s fiscal impact was distributed inequitably across different types of injuries. In absolute dollar terms, the reductions imposed on grave injury were seven times larger than those for minor injury; the largest proportional reductions were for injuries that centered on pain and disfigurement. Use of sliding scales of damages instead of or in conjunction with caps would mitigate their adverse impacts on fairness.

Scully pressured actuary, didn't break law: OIG reports

According to a report in this afternoon's "Daily Dose" (by Modern Healthcare), the DHHS OIG has concluded that Tom Scully did, indeed, pressure the CMS chief actuary to withhold the true price tag ($524 billion over 10 years) of the Medicare prescription drug benefit from Congress last fall. More than that, the Administration's earlier (and affirmatively false) figure of $395 billion was allowed to stand, because of Republicans in Congress who announced they would not support a reform package that cost more than $400 billion. No action will be taken against Scully, who no longer works for the government (he's in the DC office of Alston & Bird), and the OIG has further concluded that no criminal laws were violated. Congress itself is looking into that question, so time will tell. This story broke with the announcement that the OIG would be testifying about its conclusions before Sen. Grassley's Senate Finance Committee this afternoon. (Nothing about this appears on the committee's web site, on the OIG's "current testimony" web page, or -- needless to say -- Alston & Bird's web site as of 4:00pm today.)

Do pediatricians need lawyers in order to provide good care?

That's the tantalizing question in an article in the July 2004 issue of Pediatrics. The full article isn't available on the web, but an abstract is:

PEDIATRICS Vol. 114 No. 1 July 2004, pp. 224-228

--------------------------------------------------------------------------------

SPECIAL ARTICLE

Why Pediatricians Need Lawyers to Keep Children Healthy
Pediatricians recognize that social and nonmedical factors influence child health and that there are many government programs and laws designed to provide for children’s basic needs. However, gaps in implementation result in denials of services, leading to preventable poor health outcomes. Physician advocacy in these arenas is often limited by lack of knowledge, experience, and resources to intervene. The incorporation of on-site lawyers into the health care team facilitates the provision of crucial legal services to vulnerable families. Although social workers and case managers play a critical role in assessing family stability and finding appropriate resources for families, lawyers are trained to identify violations of rights and to take the appropriate legal steps to hold agencies, landlords, schools, and others accountable on behalf of families. The incorporation of lawyers in the clinical setting originated at an urban academic medical center and is being replicated at >30 sites across the country. Lawyers can help enhance a culture of advocacy in pediatrics by providing direct legal assistance and case consultation for providers, as well as jointly addressing systemic issues affecting children and families. Until laws to promote health and safety are consistently applied and enforced, pediatricians will need lawyers to effectively care for vulnerable children.
--------------------------------------------------------------------------------
Barry Zuckerman, MD, Megan Sandel, MD, MPH, Lauren Smith, MD, MPH and Ellen Lawton, JD

From the Department of Pediatrics, Boston Medical Center/Boston University School of Medicine, Boston, Massachusetts

Medicine and literature.

Catching up on some reading . . . the May 22 issue of The Lancet continues its series of articles by (or, in earlier installments, about) physician-writers with a truly splendid piece by Brazilian physician and author Moacyr Scliar. All are available for free (albeit with a brief registration form). Here are all the articles in this series that I know of:

• Moacry Scliar
• Martin Winckler
• Richard Selzer
• Jerome Groopman
• Perri Klass
• John Murray
• Phil Whitaker
• Jed Mercurio
• Khaled Hosseini
• Samuel Shem
• Atul Gawande
• Rita Charon
• Cecil Helman
• Jonathan Kaplan

I hope students in the Law, Literature & Medicine class I teach with Patty Hicks will get the chance to read a few of these.

Meanwhile, permit me this idle speculation: Where have all the serious lawyer-writers gone? Most seem to have settled for the easy bucks of mass-market pot-boilers with an option on the screenplay, soon to be a major motion picture opening in theater near you. Scott Turow is the exception - a gifted writer whose mysteries transcend the genre by lifting the entire enterprise up a level or two. My Scottish compadre, Sandy McCall-Smith, has done the same with his successful series on Mma. Precious Ramotswe of Botswana and her No. 1 Ladies Detective Agency. For another generation, Louis Auchincloss was comfortable writing serious fiction, and his near-contemporary was the poet Archibald MacLeish. And . . . ?

Health reform and the presidential election.

Last month (June 5), the British medical journal The Lancet hopefully titled its editorial on U.S. health care and the November election, "Bush vs Kerry: health is a critically decisive issue" (free). After surveying the relatively tepic health-reform proposals of both the Bush and the Kerry camps, however, and reminding us that the Clintons' experience in 1993 has probably turned ambitious health reform into one of the many "third rails of American politics," the editorial doesn't seem to hold out much hope for anything major in this election cycle. Voters themselves, "say they are for health reform, most, being middle class, have health insurance, and have, in the past at least, proved to be reluctant to support changes that they fear might drive up their own costs or threaten their benefits." So, in the great American tradition of doing the right thing only after all other alternatives have been exhausted, the editorialists conclude: "But as the current health-care crisis continues, and as more and more middle-class Americans see their out-of-pocket expenses rise and their benefits threatened, voters may be ready to heed calls for far more fundamental reform than either candidate now dares to propose."

The Vice-President's physician.

This week's New Yorker has an article by correspondent Jane Mayer on VP Cheney's physician's battle with addiction. The New York Times and The Washington Post picked up the story in this morning's editions, too. Specifically, the physician who famously declared Cheney fit for office four months before Cheney suffered his fourth heart attack has been battling an addiction to narcotics for nine years. Last month, he was removed as chair of George Washington University Medical Center's Department of General Internal Medicine and from the Veep's health care staff.

Mayer does a good job detailing the extent of the physicians' purchases and, inferentially, his impairment:

According to pharmacy records and customer invoices, in July, 2000, for example, the month that Malakoff wrote the letter certifying Cheney’s good health, he purchased thirty bottles of a synthetic narcotic nasal spray called Stadol from two mail-order drug-supply companies. Stadol, which can be addictive, is ordinarily used to treat migraine headaches. Each bottle contains an estimated fifteen doses. In the previous two months, he had bought eighteen bottles. In August, he bought twenty-eight more bottles. During the two-and-half-year period ending in December, 2001, Malakoff spent at least $46,238 online on Stadol and such medications as Xanax, Tylenol with codeine, and Ambien.

That's 76 bottles (and 1140 doses) in 5 months. The guidelines for prescribing the drug call for 1 dose, followed by another dose in 60-90 minutes if there is no relief from the first dose, followed by additional 2-dose sequences as needed every 3-4 hours, so Cheney's doc's 7.5 doses per day (assuming he consumed all 1140 doses during the five-month period that he placed his orders) are within the prescription guidelines for the drug. Adding Schedule III-IV drugs like Xanax, Tylenol with codeine, and Ambien, however, suggest a serious problem. (It's unclear, though, how much of the other drugs he was taking. At $92 a bottle (from drugstore.com) he would have spent $41,400 on Stadol during the two-and-a-half-year period described in Mayer's article, leaving only about $5,000 for other drug purchases.)

The issue in all this isn't the fall of a presumably talented physician into the clutches of a dastardly affliction, tragic as that is. The questions raised by Mayer's article, explicitly or implicitly, are:

• Whether the GWU administration responded appropriately when they learned of their colleague's addiction. Even though prescribing under another physician's name and DEA number, which is apparently how these prescriptions were obtained, is a civil and cirminal offense, it appears that GWU informed neither the DC licensing board nor the DEA.


• In addition to the public's legitimate interest in the health of high-ranking public officials, does the public have a similar interest in the health of the health providers who care for those public officials and pronounce them fit for office?

Medical ethicist: Honesty isn't always the best policy.

Daniel Sokol, a medical ethicist of the Imperial College Faculty of Medicine, London, has an interesting piece in the International Herald Tribune defending the use of deception in the rare case in which honesty (i.e., respecting a patient's autonomy) might lead to death or serious harm -- that is, when truth-telling is clearly not in the patient's best interests. Sokol's presentation is pretty standard fare, and most ethicists and clinicians, I suspect, would agree with his article. It's important, however, to keep this exception to the principle of respect for autonomy within bounds, lest the exception swallow up the rule.

Sokol's short piece doesn't provide much guidance for one of the more perplexing debates in medical ethics: whether it's ever ethical to prescribe a placebo for a therapeutic purpose. (Good bibliography here.) Conventional wisdom has it that the placebo effect is lost when the patient is told that she is getting a sugar pill or other inert substance, so the efficacy of the placebo depends upon deception. Sokol allows for the deception when necessary to avoid significant harm ("nonmaleficence"); would his argument also allow for deception in order to achieve a therapeutic benefit ("beneficence")? The overwhelming consensus among ethicists appears to be "no," yet the practice seems to persist among practitioners for what appears to be a variety of reasons. This piece by Gregory Loeben does a nice job of making the case against deception to produce a benefit for the patient.

July 4: George III & George II.

Cheers to the N.Y. Times editorial editors for running Barbara Ehrenreich's brilliant op-ed, "Their George and Ours." As she works her way through the Declaration of Independence's bill of particulars against George III, the parallels to our own present leaders' policies keep mounting. They will catch some flak for running this piece, I'll wager, but who can object to the closing three paragraphs:

But it is the final sentence of the declaration that deserves the closest study: "And for the support of this Declaration . . . we mutually pledge to each other our Lives, our Fortunes and our sacred Honor." Today, those who believe that the war on terror requires the sacrifice of our liberties like to argue that "the Constitution is not a suicide pact." In a sense, however, the Declaration of Independence was precisely that.

By signing Jefferson's text, the signers of the declaration were putting their lives on the line. England was then the world's greatest military power, against which a bunch of provincial farmers had little chance of prevailing. Benjamin Franklin wasn't kidding around with his quip about hanging together or hanging separately. If the rebel American militias were beaten on the battlefield, their ringleaders could expect to be hanged as traitors.

They signed anyway, thereby stating to the world that there is something worth more than life, and that is liberty. Thanks to their courage, we do not have to risk death to preserve the liberties they bequeathed us. All we have to do is vote.

Mammalian cloning continues to pose safety concerns.

From the BBC, there's a story today about U.S. researchers from Cornell who reported to the European Fertility Conference in Berlin that mouse experiments comparing assisted reproduction techniques with cloning showed "significantly impaired development in the cloned embryos compared with those derived from more conventional ART techniques and this has made us more convinced that reproductive cloning is unsafe and should not be applied to humans." The article quotes the executive director of the European Society of Human Embryology and Reproduction: "There is absolutely general agreement that reproductive cloning should be banned. It's clear from all the available experiments that it's much too dangerous." Researchers conduct research, and technologists exploit technology, because scientific challenges exist to be conquered. For the time being, only the most reckless will attempt to clone humans for reproduction, but when the safety issues is tamed, we will have to give serious consideration to the non-safety objections to reproductive cloning that were raised by the President's Council on Bioethics.

Has the U.S. lost its capacity for outrage?

That's the question I asked myself after reading Art Caplan's piece in Newsday today. Art tells the tale of the recent meeting in Denver of the American Society of Concierge Physicians: "Concierge medicine is a special, high-end form of medical care that guarantees that if you need treatment you will get it, without a hassle, seven days a week-but only for an extra fee. If you can pay amounts that range from $20 to thousands of dollars a month, you can guarantee that your phone calls will be promptly returned by your doctor and that you'll get special attention whenever you're admitted to a hospital." He contrasts the "quality medicine for the rich" philosophy of the ASCP with TennCare's recent cutbacks to the state's Medicaid program:

It is making over its state Medicaid program known as TennCare. If this program gets implemented, many of the poor, elderly, children and disabled in Tennessee who rely on Medicaid will be told simply to get over it. And other hard-pressed states may well follow suit.

Gov. Phil Bredesen, a former HMO entrepreneur, sees the challenge of health care for the poor in Tennessee in very stark terms. In a speech last February, the governor described the state Medicaid program as nothing more than an open checkbook that is continuously being raided by "doctors and hospitals and advocates" who "decide what is needed."

Caplan's opening paragraph provides a fitting close, as well: "Just how bad is the state of health care in America? Well, consider two recent developments that shine a spotlight on a system that was already showing signs of severe distress, even before the Supreme Court decided to let HMOs off the legal hook. In Colorado the rich are paying what amount to bribes to make sure that they are at the head of the line when it comes to getting health care, and in Tennessee the poor are basically being told to get lost."

I've examined concierge, or "boutique," medicine in this space before, and as recently as last week reported on a hospital in the tony Hamptons on Long Island that has offered "concierge emergency care" contracts to selected (and wealthy) residents in its service area. I understand the frustration physicians feel on the daily treadmill practicing "hamster medicine," as well as the doom and gloom many state CEO's feel as they contemplate the sinking of state budgets by seemingly boundless growth in the demand for health care dollars. But neither of the developments chronicled in Caplan's piece provides a viable answer to managed care woes or the problems of the indigent and the uninsured. In fact, what they both have in common is a set of blinders that allows the concierge docs and the state to say, "Screw the consequences. We're holding on to whatever we can keep for ourselves, despite the cost to the system."

PhRMA proposes guidelines for publication of negative clinical trial results.

As previously noted, this is generating a lot of interest on the part of the press, NYS Att'y Gen'l Eliot Spitzer, and others. (Kaiser Foundation's web page has a good summary of the various strands of this issue.) Now the drug industry's trade association, PhRMA, has revised its principles on the subject, according a story in today's Wall Street Journal (requires paid subscription). Click for the press release, a backgrounder on clinical trials, and "Principles on Conduct of Clinical Trials and Communication of Clinical Trial Results." The updated voluntary guidelines call for "timely communication of meaningful study results, regardless of the outcome of the study," and apply to clinical trials started after October 2, 2002.

Companies are currently required to publicize the results of trials only in connection with initial applications for marketing permission, but not in the post-marketing phase when drugs are tested for their efficacy in connection with other diseases or in comparison with other drugs. An editorial in today's Washington Post notes that pressure to publish negative results may backfire: "Forcing companies to publish results of all trials, as opposed to the fact of their existence, is more complicated, because a simple government regulation requiring publication of all results of all clinical trials might backfire and wind up discouraging companies from conducting any trials at all. For that reason, Congress -- not the New York courts -- needs to take up this issue again and look at incentives that might persuade companies to conduct more and better clinical trials, even if they aren't commercially advantageous. It should also consider establishing a routine, nationwide system of comparative drug testing, using university and other academic researchers. Any system that leads to the concealment or manipulation of research isn't serving doctors, patients or, in the end, even drug companies very well."

Lucky for Florida the antitrust laws don't apply to state action.

As reported in today's "Daily Dose" from Modern Healthcare: "Florida banned specialty hospitals aimed at a single condition and eliminated its certificate-of-need law for new adult open-heart surgery and angioplasty programs at general hospitals. The law, signed yesterday by Gov. Jeb Bush, also exempts from CON the addition of beds to existing structures, but a CON is still required for new structures. . . . 'There are no single-specialty niche hospitals in the state of Florida at this time, and this legislation would prevent any development,' [Ralph Glatfelter, Sr. VP at the Florida Hospital Association] said." Hospitals generally hate the competition from specialty hospitals, especially when the new entity is financed and/or organized by members of the general hospital's own medical staff. Some hospitals have succeeded in dodging the bullet by joining with their docs in a joint-ventured specialty hospital. For hospitals that lack the money or the good relationship with their physicians to pull off a joint venture, the new competition can be devastating. Florida's new laws -- SB 182 and HB 329 -- provide such hospitals with welcome relief from the competition.

Charity care and nonprofit hospitals: ABA teleconference materials (4/28/04).

Here's a page of good background materials on charity care and tax-exempt status generally, some policy considerations from Nancy Kane at Harvard's School of Public Health, and some local insights into Champaign County's decision to revoke the tax-exempt status of Provena Covenant Medical Center. After diligently scouring the Web, I have come up empty-handed in my search for a copy of the decision of the Illinois Department of Revenue in that case.

More on Provena Covenant.

The Kaiser Family Foundation's website has a good summary of the WSJ journal article mentioned below. The Champaign County Board of Review's decision is here. I'll get a link to the Illinois Department of Revenue's decision as soon as I can find it.

Catholic nonprofit hospital fights to regain tax exemption in Illinois.

The big news before the recent rash of hearings into and lawsuits against tax-exempts was the decision by Illinois' Department of Revenue affirming the Champaign County Board of Review's determination that the Provena Covenant Medical Center in Urbana was not sufficiently charitable in its operations and no longer deserved to be exempt from local property taxes. The saga is described today in a Wall Street Journal article (requires paid subscription). The Champaign News-Gazette ran a good summary of the case in February after the Department of Revenue handed down its decision. An earlier WSJ article is also available on the web page of the Association of Healthcare Philanthropy.

U.S. health care outcomes compare poorly with other developed nations.

Bob Herbert, in his column in today's N.Y. Times, with a substantial assist from the research of Dr. Barbara Starfield at Johns Hopkins, documents the comparative rankings of this country's health outcomes (e.g., low birth weight percentages, neonatal mortality, infant mortality, life expectancy at age 1 and at age 15):

"Of 13 countries in a recent comparison, the United States ranks an average of 12th (second from the bottom) for 16 available health indicators."

[Dr. Starfield] said the U.S. came in 13th, dead last, in terms of low birth weight percentages; 13th for neonatal mortality and infant mortality over all; 13th for years of potential life lost (excluding external causes); 11th for life expectancy at the age of 1 for females and 12th for males; and 10th for life expectancy at the age of 15 for females and 12th for males.

The standard rejoinder is that the U.S.'s relatively poor showing in such comparisons is not a direct result of a poor health care delivery system but instead is due to the effects of poverty, differences in educational opportunities, and similar "background" effects that can't be cured by the health care system. At some point, however, our leaders (and those, like John Kerry, who aspire to be) need to come to grips with the organization, finance, and delivery of health care in this country. We have the most technically advanced health care in the world, and centers of excellence widely distributed across the country. But that doesn't translate into access and affordability:

The U.S. has the most expensive health care system on the planet, but millions of Americans without access to care die from illnesses that could have been successfully treated if diagnosed in time. Poor people line up at emergency rooms for care that should be provided in a doctor's office or clinic. Each year tens of thousands of men, women and children die from medical errors and many more are maimed. . . .

To get a sense of just how backward we're becoming on these matters, consider that in places like Texas, Florida and Mississippi the politicians are dreaming up new ways to remove the protective cloak of health coverage from children, the elderly and the poor. Texas and Florida have been pulling the plug on coverage for low-income kids. And Mississippi recently approved the deepest cut in Medicaid eligibility for senior citizens and the disabled that has ever been approved anywhere in the U.S.

Even the affluent are finding it more difficult to obtain access to care. For patients with insurance the route to treatment is often a confusing maze of gatekeepers and maddening regulations. The costs of insurance are shifting from employers to employees, and important health decisions are increasingly being made by bureaucrats and pitchmen interested solely in profits.

In the maddening din that passes for a national conversation in this country, distinguished voices like Dr. Starfield's are not easily heard.

Echoing so many other patient advocates, she continues to call for movement on two crucial needs: coverage for the many millions who currently do not have access to care, and the development of a first-rate primary care system, which would bring a sense of coherence to a health care environment that is both chaotic and wildly expensive.

Maybe the reforms described recently by Porter and Teisberg in the May-June Harvard Business Review are the way to go, though I see precious little in their proposal that directly addresses the uninsured, and primary care is only obliquely addressed.

Hospital billing practices reviewed.

It's an old and familiar story for anyone with any experience as a physician, pharmacist, hospital exec, patient, or patient's parent or spouse. (Have I left out anyone?) Routine, 2-hour surgery is billed at $25,652.14, with 4-figure charges for mysteriously named items, astronomical pricing codes for everyday items (the medical equivalent of the Defense Department's $700 hammer), and plain old everyday errors. It's described in a story in yesterday's Washington Post, which relates billing practices to, among other things, the Congressional inquiries into nonprofit hospitals' business practices and the recent class action lawsuits challenging the nonprofits' record in providing charity care (more on these developments here).

Latest marketing ploy from Big Pharm?

As reported in today's N.Y. Times (requires paid subscription), Schering-Plough's been sending 5- and 6-figure checks, unbidden, to physicians "in exchange for an attached 'consulting' agreement that required nothing other than his commitment to prescribe the company's medicines." (Kind of makes you nostalgic for the days when they thought they could buy the loyalty of physicians for the price of a lobster salad lunch once a month.) According to the article, there are several federal investigations looking into the marketing practices of several large drug companies (e.g., Johnson & Johnson, Wyeth and Bristol-Myers Squibb), including a Boston-based look into Schering-Plough.

The article interviewed 20 physicians about the details of the Schering-Plough scheme:

Schering-Plough's tactics, these people said, included paying doctors large sums to prescribe its drug for hepatitis C and to take part in company-sponsored clinical trials that were little more than thinly disguised marketing efforts that required little effort on the doctors' part. Doctors who demonstrated disloyalty by testing other company's drugs, or even talking favorably about them, risked being barred from the Schering-Plough money stream.

Makes you wonder about the company's view of the Medicare anti-kickback law (42 U.S.C. § 1320a-7b(b)), the marketing rules published two years ago by the industry's trade association, PhRMA, and DHHS/OIG's "Compliance Guidance for Pharmaceutical Manufacturers."

William Jewell College (Liberty, MO) adds bioethics major.

William Jewell College, according to a recent AP story (via the Lawrence (KS) Journal-World), has added a bioethics major. Two features of the story seem especially noteworthy:

• Kansas City planners see the major as an important phase in the emergence of KC as a biomedical research center: "The major will include study in biology, chemistry, and religion and philosophy, and it's being introduced as the Kansas City area positions itself to become a hub for biomedical research.
  
  "The Center for Practical Bioethics is in Kansas City, as is the Stowers Institute for Medical Research.
  
  "'I don't think there is any question it will be synergistic,' said Bill Duncan, president of the Kansas City Area Life Sciences Institute."
  
  As Dallas strives to establish itself as the Southwest's biomedical research center, it doesn't seem to have occurred to the powers that be that all this state-of-the-art research just might be complemented by an equally world-class ethics program.



• Best quote: "'I don't see it leading to great employability,' said Bill Bondeson, a medical ethics professor at the University of Missouri in Columbia," in response to William Jewell's reported "hope[] that its graduates will find a ready market for their degrees."

Professor Bill is undoubtedly correct, but if I were a medical-school admissions officer, a grad with this major would probably rocket right to the top of the list.

AMA beating the med-mal crisis drum loudly.

N.Y. Times op-editorialist Bob Herbert has followed up on last Monday's column with another swipe at those who claim that soaring med mal insurance premiums are the result of massive incrases in med mal payouts. This time, though, it's the AMA who gets rapped for feeding the frenzy. Claiming that 20 states are now in a med-mal insurance crisis (up from 12 in 2002), the AMA has conveniently mapped out the whole country for all to see which states are in crisis, which ones are showing problem signs, and which states are "currently okay" (apparently only 6 states are in this last category). An interactive version of the map, with anecdotes, a smattering of statistics, and a description of the current state of the health-care liability laws, can be found here.

In today's column, Herbert claims that the evidence has been misstated or skewed by the AMA, at least as respects Missouri, Florida, and New Jersey. I'd add Texas to the list of so-called crisis states where the evidence seems to point to the opposite conclusion. After the surge of filings to beat the September 1, 2003, effective date of our med-mal reform statute, new filings seem to have virtually dried up. There's been little or no reduction in premiums in tort-reformed states, though, and I am betting (with Bob Herbert) that the docs have been sold a bill of goods about the causes (and cures) for their insurance-premium crisis. For more information, and a slightly more balanced view, check out the GAO report on the alleged med-mal crisis, discussed here last August 1.

Parkland: public hospital blues.

The Dallas Morning News' Sherry Jacobson has been doing a fine job in two recent pieces (6/23, 6/24) covering Parkland's financial woes. Bottom line: Parkland's caught in The Big Squeeze: Federal law requires the hospital to provide emergency medical care to anyone who needs it, regardless of their county (our country) of residence. But state law requires other counties to reimburse Dallas only for care provided to indigents. And each county gets to define "indigency" as it sees fit. So Collin County, which long ago decided it did not want to tax its own residents for indigent health care, has defined indigency to top out at about $4,000 a year for a family of four (about 1/4 the federal definition of poverty). Any Collin County resident making more than that gets treated by Parkland at Dallas County's expense. What is wrong with this picture?

Discounting bills for uninsured patients: not as easy as it sounds.

The Wall Street Journal ran a good article (subscription required) Thursday on the difficult choices faces by hospital administrators when uninsured patients rack up hefty bills: Who should get a discount? And how much of the bill should be written off? Uninsured patients come in all shapes and sizes, and hospital policies are only a starting point for making the hard choices posed by uninsured patients.

More on tax-exemptions.

I particularly recommend a recent (June 22) publication by the staff of the Joint Committee on Taxation entitled "Description of Present Law Relating to Charitable and Other Exempt Organizations and Statistical Information Regarding Growth and Oversight of the Tax-Exempt Sector." It's a good overview of the tax-exempt industry and horn-book style overview of the legal basics.

Tax-exempt orgs much in the news.

There's a lot of scrutiny of tax-exempt organizations these days, much of it on the health care industry, and all of it of potential significance to tax-exempt health care providers. Here's a quick run-down of yesterday's developments:

• Richard Scruggs announced yesterday that he (or related firms) has filed 5 more class-action suits against 8 more defendants challenging the amount of charity care the defendants provide. The press release is on a litigation web page here, along with copies of all 18 complaints. As Charles Bailey, g.c. of the Texas Hospital Association, said in an article in The Dallas Morning News, it's surprising that two hospitals (so far) in Texas have been targeted, since Texas requires nonprofit hospitals to provide a minimum amount of charity care in order to maintain their nonprofit status. The "safe harbor" requirement is 4% of net operating revenues for charity care and unreimbursed govern-sponsored indigent health care and 5% in total community benefits.
• The Senate Finance Committee began hearings under the title, "Charity Oversight and Reform: Keeping Bad Things from Happening to Good Charities." There were three panels and a total of 13 witnesses, not counting Senators Grassley and Baucus, who presented their own member statements. The hearing can be viewed with streaming video through RealAudio. There's also a 19-page "staff discussion draft" of Tax Exempt Governance Proposals, if you want to see where these hearings are headed.
• The IRS announced at the Senate hearing that it is launching an enforcement initiative to examine compensation practices of tax-exempt and charitable organizations. You can read the details in Commissioner Everson's testimony or you can read about it in this AP article (via The Houston Chronicle).
• Over on the House side, the Oversight Subcommittee of the House Ways and Means Committee held its "First Hearing in a Series on Tax Exemption: Pricing Practices of Hospitals": two panels, nine witnesses. There's a good AP report (via Forbes.com) on the House hearings.

Not-for-profit litigation.

More suits were filed today against some health care giants, including Catholic Health Initiative and Baylor Health Care System. Here's a more stable link to the web page where the pleadings can be found: http://www.nfplitigation.com/NotForProfit/disclaimer.aspx.

Unpublished (i.e., negative) clinical trial results.

While I pondered how to blog this topic efficiently, along came the folks at Kaiser Family Foundation with a characteristically terrific summary of three recent newspaper reports on this important topic. If NY Attorney General Eliot Spitzer is right about this, GlaxoSmithKline's decision to withhold negative research results about the side effect of the antidepressant Paxil in children "the . . . studies . . . failed to demonstrate that Paxil is effective and . . . suggested a possible increased risk of suicidal thinking and acts."

Supreme Court: ERISA preempts state-law claim against HMOs.

As expected, the Supreme Court today decided that ERISA does, in fact, preempt the tort-like cause of action created by the Texas legislature in the Texas Health Care Liability Act, at least as against HMO's providing health care coverage through an employer. Indeed, the cause of action is completely preempted (§ 502(a)(1)(B)), so ERISA not only provides a defense, it also creates a basis for removal of the state-law claims from state court to federal court. This is a technical issue, and if you haven't been following it pretty closely, consider going to a news site like Bloomberg's or Reuter's for the 5¢ version. The 25¢ version is in the Court's syllabus (below). For all the gory details, you can read the unanimous opinion in Aetna Health Inc. v. Davila, No. 02-1845 (combined with CIGNA HealthCare of Texas, Inc. v. Calad, No. 03-83) here.

The Court's syllabus:

Respondents brought separate Texas state-court suits, alleging that petitioners, their health maintenance organizations (HMOs), had refused to cover certain medical services in violation of an HMO’s duty “to exercise ordinary care” under the Texas Health Care Liability Act (THCLA), and that those refusals “proximately caused” respondents’ injuries. Petitioners removed the cases to federal courts, claiming that the actions fit within the scope of, and were thus completely pre-empted by, §502 of the Employee Retirement Income Security Act of 1974 (ERISA). The District Courts agreed, declined to remand the cases to state court, and dismissed the complaints with prejudice after respondents refused to amend them to bring explicit ERISA claims. Consolidating these and other cases, the Fifth Circuit reversed. It found that respondents’ claims did not fall under ERISA §502(a)(2), which allows suit against a plan fiduciary for breaches of fiduciary duty to the plan, because petitioners were being sued for mixed eligibility and treatment decisions that were not fiduciary in nature, see Pegram v. Herdrich, 530 U.S. 211; and did not fall within the scope of §502(a)(1)(B), which provides a cause of action for the recovery of wrongfully denied benefits, because THCLA did not duplicate that cause of action, see Rush Prudential HMO, Inc. v. Moran, 536 U.S. 355.

Held: Respondents’ state causes of action fall within ERISA §502(a)(1)(B), and are therefore completely pre-empted by ERISA §502 and removable to federal court.

(a) When a federal statute completely pre-empts a state-law cause of action, the state claim can be removed. See Beneficial Nat. Bank v. Anderson, 539 U.S. 1, 8. ERISA is such a statute. Because its purpose is to provide a uniform regulatory regime, ERISA includes expansive pre-emption provisions, such an ERISA §502(a)’s integrated enforcement mechanism, which are intended to ensure that employee benefit plan regulation is “exclusively a federal concern,” Alessi v. Raybestos&nbhyph;Manhattan, Inc., 451 U.S. 504, 523. Any state-law cause of action that duplicates, supplements, or supplants ERISA’s civil enforcement remedy conflicts with clear congressional intent to make that remedy exclusive, and is therefore pre-empted. ERISA §502(a)’s pre-emptive force is still stronger. Since ERISA §502(a)(1)(B)’s pre-emptive force mirrors that of §301 of the Labor Management Relations Act, 1947, Metropolitan Life Ins. Co. v. Taylor, 481 U.S. 58, 65—66, and since §301 converts state causes of actions into federal ones for purposes of determining the propriety of removal, so too does ERISA §502(a)(1)(B).

(b) If an individual, at some point in time, could have brought his claim under ERISA §502(a)(1)(B), and where no other independent legal duty is implicated by a defendant’s actions, then the individual’s cause of action is completely pre-empted by ERISA §502(a)(1)(B). Respondents brought suit only to rectify wrongful benefits denials, and their only relationship with petitioners is petitioners’ partial administration of their ERISA-regulated benefit plans; respondents therefore could have brought §502(a)(1)(B) claims to recover the allegedly wrongfully denied benefits. Both respondents allege violations of the THCLA’s duty of ordinary care, which they claim is entirely independent of any ERISA duty or the employee benefits plans at issue. However, respondents’ claims do not arise independently of ERISA or the plan terms. If a managed care entity correctly concluded that, under the relevant plan’s terms, a particular treatment was not covered, the plan’s failure to cover the requested treatment would be the proximate cause of any injury arising from the denial. More significantly, the THCLA provides that a managed care entity is not subject to THCLA liability if it denies coverage for a treatment not covered by the plan it administers.

(c) The Fifth Circuit’s reasons for reaching its contrary conclusion are all erroneous. First, it found significant that respondents asserted tort, rather than contract, claims and that they were not seeking reimbursement for benefits denied. However, distinguishing between pre-empted and non-pre-empted claims based on the particular label affixed to them would allow parties to evade ERISA’s pre-emptive scope simply by relabeling contract claims as claims for tortious breach of contracts. And the fact that a state cause of action attempts to authorize remedies beyond those that ERISA §502(a) authorizes does not put it outside the scope of ERISA’s civil enforcement mechanism. See, e.g., Pilot Life Ins. Co. v. Dedeaux, 481 U.S. 41, 43. Second, the court believed the plans’ wording immaterial because the claims invoked an external ordinary care duty, but the wording is material to the state causes of action and the THCLA creates a duty that is not external to respondents’ rights under their respective plans. Finally, nowhere in Rush Prudential did this Court suggest that ERISA §502(a)’s pre-emptive force is limited to state causes of action that precisely duplicate an ERISA §502(a) cause. Nor would it be consistent with this Court’s precedent to do so.

(d) Also unavailing is respondents’ argument that the THCLA is a law regulating insurance that is saved from pre-emption by ERISA §514(b)(2)(A). This Court’s understanding of §514(b)(2)(A) is informed by the overpowering federal policy embodied in ERISA §502(a), which is intended to create an exclusive federal remedy, Pilot Life, 481 U.S., at 52. Allowing respondents to proceed with their state-law suits would “pose an obstacle” to that objective. Ibid.

(e) Pegram’s holding that an HMO is not intended to be treated as a fiduciary to the extent that it makes mixed eligibility decisions acting through its physicians is not implicated here because petitioners’ coverage decisions are pure eligibility decisions. A benefit determination under ERISA is part and parcel of the ordinary fiduciary responsibilities connected to the administration of a plan. That it is infused with medical judgments does not alter this result. Pegram itself recognized this principle, see 530 U.S., at 231—232. And ERISA and its implementing regulations confirm this interpretation. Here, petitioners are neither respondents’ treating physicians nor those physicians’ employees.

307 F.3d 298, reversed and remanded.

This case had to come out the way it did. The Fifth Circuit's attempt to distinguish the THCLA cause of action against HMO's from the types of claims previously determined by the Supreme Court to be preempted by ERISA was completely off the wall.

That's not to say that the HMO's shouldn't be held accountable for their mistakes, nor that the ERISA remedy is, in many cases, a cruel joke. But existing Supreme Court interpretations of existing ERISA language leave little or no room for such an outcome. So the ball is squarely back in Congress' lap to make changes to ERISA, though its repeated failures to do so in its previous attempts gives little encouragement that they will be able pull off such a miracle, especially in an election year.