If it can happen to Harvard . . .

Alice Dembner reports in today's Business section of The Boston Globe that Harvard University and Beth Israel Deaconess Hospital "will pay $2.4 million to settle allegations that they misused four federal research and training grants, improperly billing the government for salaries and expenses, the US attorney's office said yesterday." Universities and teaching hospitals around the country need to wake up and smell the coffee. Regardless of the source of the federal grant money -- NIH, NSF, you name it -- the era of playing games with the actual use to which funds are put is over:

[T]he agreement specifically leaves open the possibility of further action against Dr. Jeanne Wei, the geriatrician who was the principal investigator for the grants. The agreement also requires the institutions to cooperate with "the government's investigation of individuals" involved with the four grants.

Wei, the former head of Harvard's division on aging and Beth Israel's division of gerontology, resigned from those administrative posts in 1999 and left Harvard Medical School and the hospital in June 2002. She is currently a professor and executive vice chairman of the geriatrics department at the University of Arkansas for Medical Sciences. She did not respond to a request for comment yesterday.

"This settlement should send a message that institutions who accept federal grant money, no matter who they are, must strictly adhere to the terms and conditions of those grants," said US Attorney Michael J. Sullivan in a statement.

The press release from the U.S. Attorney's office details the misuse:

• salaries of physician scientists who did not work on the grant;
• salaries of physician scientists who did not meet the citizenship requirements of the grant;
• the salary of a physician scientist who did not meet the 75% effort requirement of the grant; and
• salary expenses of the Principal Investigator in excess of the budgeted amount;
• supply and equipment expenses incurred in connection with other projects not related to the grant, and expenses incurred by physician scientists who were not eligible to work on the grant or did not work on the grant; and
• expenses related to the use of research animals that were used for other projects not related to the grant or were used by physician scientists who were not eligible to work on the grant.

The use of the federal False Claims Act is particularly noteworthy for those school officers who may not think compliance is a big deal. Anyone with knowledge of the wrong-doing can bring a whistleblower (or "qui tam") action under 37 U.S.C. §§ 3729-3730, and if the fraud is proved, the whistleblower (technically, "the qui tam relator") almost always shares in the government's recovery, which may be up to two times the amount of damages actually sustained by the government. The whistleblower's share may be 15-25% of the recovery if the government took over the litigation of the suit, or 25-30% is the government declined to litigate the claim and the qui tam relator had to go it alone. In the Harvard/Deaconess case, if there had been a qui tam relator (which it appears there was not), her share (if she'd litigated without the government's assistance) would have been as high as $720,000. Small wonder that private qui tam actions under the False Claims Act constitute one of the fastest-growing areas of federal litigation around. (The Fried Frank firm's web page is a great resource for information about the Civil War-era statute and the litigation it has spawned.) And all the more reason why large grant recipients who don't invest in a compliance officer to make sure they stay clean are penny wise and pound foolish.

Nonprofit hospitals targeted for charging premium prices needy patients.

UPI has filed a story based upon an earlier Wall Street Journal report (requires paid subscription) about a series of suits -- with more to come -- against nonprofit hospitals:

Richard Scruggs, the Mississippi lawyer whose legal attack on the tobacco industry helped bring about historic changes -- and multibillion-dollar settlements -- is setting his sights on not-for-profit hospitals which he alleges are overcharging uninsured patients and subjecting some to harsh bill-collection tactics.

Late yesterday, Mr. Scruggs and other lawyers -- including some who collaborated with him on the tobacco litigation -- filed class-action suits in federal courts in eight states against about a dozen not-for-profit hospital systems, challenging whether those institutions deserve the tax exemptions they have enjoyed for so long.

The complaints have minor variations, but all are essentially breach-of-contract suits, centered around the notion that not-for-profit hospitals have an explicit or implicit contract with the government to treat needy patients with compassion in return for significant tax breaks. The suits argue that the hospitals have violated that contract by charging uninsured patients premium prices, while they negotiate deep discounts with insurers, HMOs and government programs such as Medicare and Medicaid. Some hospitals go further and use tough tactics to collect unpaid bills, including sometimes placing liens on homes and assessing interest, fines and legal fees.

According the Modern Healthcare's Daily Dose (requires paid subscription), "[t]he charges include breaches of charitable trust, consumer fraud, deceptive business practices, unjust enrichment, and violations of the Emergency Medical Treatment and Active Labor Act."

Think there's any connection between these suits and the letter from Tommy Thompson, Secretary of DHHS, to the president of the American Hospital Association last February, essentially scolding the AHA for suggesting that DHHS rules prohibit hospitals from charging indigent patients less than the full billed charge for hospital services?

Antitrust and hospital consolidations.

In a late-afternoon report today, Modern Healthcare's Mark Taylor wrote that "the American Hospital Association delivered a 17-page letter to the Federal Trade Commission and the Justice Department's antitrust division rejecting hospital consolidation as a key driver of healthcare costs and pleading for a review of health insurers' conduct. The AHA's letter anticipates the expected release this summer of the FTC and Justice Department's joint report on their two years of hearings on healthcare competition." After reading the analysis piece in the Harvard Business Review by Michael E. Porter and Elizabeth Olmstead Teisberg, it is hard to see how a sentient human being can argue that consolidations haven't had an impact on both health care costs and quality.

AMA resolution to allow denial of care to plaintiffs' lawyers and families.

I discussed this resolution here last week, and today the N.Y. Times reports that the resolution filed by Dr. J. Chris Hawk III "drew an angry response from colleagues on Sunday at the annual meeting of the association. Many doctors stood up to denounce the resolution in passionate speeches - even after its sponsor . . . asked that it be withdrawn."

Medical futility.

Today's Allentown (Pa.) Morning Call has a long, well-written article on medical futility. The author, Ann Wlazelek notes that

a national turnabout in medical ethics, one in which doctors no longer want to employ all that medical science has to offer to keep patients alive and families find themselves fighting for their loved ones' right to live.

It's a shift in thinking that evolved in the past decade from the realization that it may be more humane to comfort than to try to cure patients near the end of life.

Backed by court orders and medical ethicists, hospitals have adopted little-known policies that declare ''doctors know best'' in deciding when to withhold or withdraw potentially life-saving treatments. As a result, a patient's final wishes may not be carried out, even when dictated in a living will or other legal document.

''Years ago, it was the physician who wouldn't stop. Now, it's the opposite: The doctor wants to give up and the family doesn't,'' said Dr. Joseph Vincent, an internist and founding member and chairman of the medical ethics committee at Lehigh Valley Hospital.

Most times, doctors and families concur about end-of-life treatments such as resuscitation, ventilators and feeding tubes. But when they don't, relations can get nasty. Relatives who persist in their protest can find themselves confronted by security guards, out-of-pocket medical bills and court petitions for guardianship.

The turnabout has taken place over the past 10 years. Patients began losing trust in their physicians when health maintenance organizations paid doctors to restrict access to expensive specialists and tests. Also, studies proved the most advanced technology and medicines cannot always keep patients alive but can cause them harm. The example cited most often is the risk of breaking ribs or causing nerve damage when performing chest compressions during CPR.

The article discusses a hospital policy adopted at Lehigh Valley Hospital-Muhlenberg:

"If all of these steps are taken and the family remains unconvinced, neither the doctor nor the hospital are required to provide care that is not medically indicated, and the family may seek a substitute physican (if one can be found) and another hospital (if available). The Lehigh Valley Hospital will assist the family in their efforts to find those substitutes."

Stephen E. Lammers, a professor of religious studies at Lafayette College, said he helped Vincent draft LVH's guidelines as "a way of signaling to everyone that the insistence upon continued treatment went beyond accepted medical practice."

The difficulty with the guidelines is illustrated by the article's discussion of a heart-attack victim as to whom continued aggressive treatment was thought to be futile by the attending physicians, nurses, technicians, social workers, and a chaplain. Despite the hospital's policy, aggressive therapy was continued until the day the patient was transferred to another facility; she died the following day.

Under LVH's guidelines, when the family and medical staff cannot reach consensus, one of four things can happen: The medical staff concedes to the family's wishes and continues to treat aggressively; care is transferred to another doctor or medical facility, as in the Jandras case; a local judge or court is consulted; or the doctor refuses to treat the patient.

Vincent said the last option to refuse treatment ''takes courage'' on the part of the physician because he or she will most likely be sued. No doctor at LVH has refused to treat a patient, he said, but some patients have been transferred to other facilities.

The Lehigh Valley problem -- the dark cloud of legal liability -- has been addressed in Texas. Under the Texas Health & Safety Code § 166.046, a physician, other health care professional, or hospital that refuses treatment deemed not to be beneficial to the patient, including "futile" care, is immune from criminal liability, civil liability, or professional discipline, as long as all of the elements of the law's "due process" provisions are followed, include a mandatory ethics committee consultation and reasonable attempts to transfer the patient to another provider or facility if the family and health care team continue to be at an impasse.

The mandatory ethics consultation is a unique feature of the Texas law that was the first of its kind in the country and, to my knowledge, remains the only one. The newspaper article addresses the potential utility of ethics consultations:

Despite the shift in medical ethics, many relatives resolve their differences with doctors at LVH through the hospital ethics committee.

One satisfied consumer, Erica Robbins of West Chester, said the committee eased tension between a doctor and the family regarding her elderly aunt's need for a breathing machine and related surgery.

The specialist initially had told Robbins he would not recommend putting 91-year-old Olga Katz of Bethlehem on a ventilator because she had congestive heart failure and probably would not survive her hospital stay.

"I felt insulted that someone who had just met her 20 minutes earlier would make a decision about what she wanted," Robbins said.

At the same time, she didn't want to make the decision on her own, so Robbins and her family consulted two rabbis and researched Jewish law in Israel. The law said ventilate.

Robbins lauded the ethics committee for allowing her, her husband and sister-in-law to speak about Katz as the vibrant person and Holocaust survivor that she was. Katz eventually left the hospital, Robbins said, and lived another six months.

This vignette illustrates another often misunderstood feature of hospital ethics committees: Any committee worth its salt will be just as open to the family in a futility dispute as to the treatment team, and when the case for "futility" just hasn't been made, ethics committees will recommend continued treatment.

The full article covers many important points and is well worth checking out.

Redefining parenthood.

Michael Douglas' ex-wife, Diandra, moves in with Zack Hamton Bacon III, a New York hedge-fund executive. When they try to have kids by IVF and failed, they tried a surrogate, and that failed, as well. (It's unclear whether the IVF attempts and the surrogacy attempt are the result of an infertility problem with one of the prospective parents or is simply a matter of preference. Both Diandra and Zack are parents of children from their previous marriages.) They engage the services of another surrogate in Southern California, where Diandra lives when she's not in NYC. The surrogate gets pregnant through IVF with a donated oocyte. In fact, she's carrying twins, who are born about 3 months early.

Diandra and Zack are now splitting. She's filed for custody in California. He's filed in Manhattan for an order that would force Diandra to bring the children to New York. If the case stays in California, is Diandra -- who is neither the genetic mother nor the gestational mother -- the mother of the boys and therefore entitled to assert parental rights? Students in this summer's Bioethics and Law course know the answer, courtesy of Johnson v. Calvert and Buzzanca v. Buzzanca. For everyone else, here's the end of today's article in the N.Y. Times:

If the case stays in California, the fact that Ms. Douglas is not the biological or genetic mother of the twins is unlikely to make a difference, because case law here emphasizes intent when deciding who is a legal parent, said Leslie Ellen Shear, an Encino lawyer who has been involved in many surrogacy cases.

Surrogacy, unmarried parents, relocation issues, allegations of domestic violence are all becoming common in family court cases, she said. Which doesn't mean that they are easy for courts to decide.

But she noted, "We invented courts to deal with all the difficult problems for which there is no social consensus."

Of course, all of this presumes that California law would apply. I don't know whether New York's law would be any different, but if it is, then this will shape up into an epic choice-of-law battle before it becomes an epic family-law or bioethics battle.

If California is still Diandra's domicile, and the contract was entered into and performed there, and the children are there, presumably California law would apply. Even if the case were litigated in New York, which seems to be what Zack is angling toward, New York courts might well conclude that California law should apply. Or not . . . .

Hospital accused of paying illegal remuneration.

Today's Wall Street Journal has a report (requires subscription) on the case against Alvorado Hospital Medical Center and its former CEO, Barry Weinbaum. Prosecutors charge that the recruitment deal that lured physicians to the hospital constituted illegal remuneration in violation of 42 USC § 1320a-7b(b), which makes it a crime to pay "any remuneration (including any kickback, bribe, or rebate) directly or indirectly, overtly or covertly, in cash or in kind" in return for a referral.

As common as such recruitment deals are in the health care industry, this is a case worth watching. The WSJ article can be found for free on the San Francisco Chronicle's web site.

U.S. won't appeal jury verdict in St. David's case.

St. David's can rest easy, finally. After an epic struggle with the federal government, St. David's Hospital in Austin can bank on a March 2004 jury verdict, which held that the hospital retained sufficient control after its partnership with HCA that it could remain tax-exempt. According to an item in today's Daily Dose, the U.S. won't appeal the trial court judgment (although it did file a notice of appeal, just in case). According to the article, "Had St. David's lost, it could have owed nearly $40 million in back taxes, interest and penalties, [St. David's CEO Carol] Clark said." You can get a pretty good summary of the case here; the opinion of the U.S. Court of Appeals for the Fifth Circuit lays out the whole case (before the remand that led to the district court judgment that isn't being appealed by the U.S.).

Should Doctors Help With Executions?

Good article in today's N.Y. Times about the ethics of physician involvement in executions. Here's the crux of the problem:

About 25 states allow or require doctors to be present at executions. But information on the number of doctors who participate in executions is hard to come by, as states generally refuse to name anyone who does so, citing security and privacy concerns. . . .

Many of the states that encourage doctors to participate in executions have seemingly contradictory laws that allow doctors to be disciplined by state medical boards for violating codes of medical ethics. Those codes almost universally forbid participation in executions.

The American Medical Association's ethics code, for instance, says that "a physician, as a member of a profession dedicated to preserving life when there is hope of doing so, should not be a participant in a legally authorized execution."

The code forbids doctors to perform an array of acts at executions, including prescribing the drugs, supervising prison personnel, selecting intravenous sites, placing intravenous lines, administering the injections and pronouncing death.

"They're not allowed to determine that the execution has been unsuccessful so that the execution can be repeated," said Dr. Stephen H. Miles, a professor of medicine at the University of Minnesota and author of "The Hippocratic Oath and the Ethics of Medicine."

But a survey of doctors in 2001 found that more than 40 percent would be willing to perform at least one of the forbidden activities.

Scholars who have studied the matter said they knew of no state board action against a doctor for aiding in a lawful execution. . . .

At least eight states . . . also seek to shield doctors from professional discipline through laws saying that aiding in executions is not the practice of medicine.

The AMA Code provision in question is E-2.06.

Interestingly, the Supreme Court may be heading toward a position that the absence of a physician's involvement in lethal injections may contribute to the execution's unconstitutionality. As the Times article points out:

In a unanimous decision on May 24 allowing a death row inmate to challenge lethal injections as cruel and unusual punishment, the United States Supreme Court appeared to suggest that a doctor should be required for at least some procedures.

The inmate in that case, David L. Nelson, had badly damaged his veins by long-term drug use, and went to court to fight a plan by Alabama prison officials to make a two-inch incision in his arm or leg to allow his execution to proceed. "There was no assurance," Justice Sandra Day O'Connor wrote in the decision, "that a physician would perform or even be present for the procedure."

The case in question is Nelson v. Campbell, No. 03-6821.

Doctors getting feisty: are there any ethical limits?

NPR's Morning Edition today ran a segment it describes this way:

A South Carolina doctor is asking the American Medical Association to approve as ethical a policy that would permit doctors to refuse treating medical malpractice lawyers. The proposal demonstrates how heated the debate over medical malpractice has become.

At 4 minutes and 2 seconds, it's well worth a listen. When the transcript becomes available, I'll offer some salient excerpts (in the spirit of Fair Use). For now, here's the gist: Fed up with the perceived effect of allegedly frivolous lawsuits, this physician believes he is so biased against plaintiffs' attorneys that he can't trust himself to provide competent medical care.

The Charleston (S.C.) Post & Courier ran a story about this physician's quest in its May 29 edition (requires free registration):

Tucked among the stacks of resolutions to be debated at the American Medical Association's annual meeting next month will be one that, if approved, is sure to inflame the already white-hot debate over medical malpractice liability reforms. It also may sound familiar to South Carolinians: The proposal urges the AMA to inform doctors that it is not unethical to stop treating attorneys and their families in non-emergency cases.

The man behind the idea is prominent Charleston surgeon Dr. Chris Hawk. In March, he urged doctors at the South Carolina Medical Association meeting to quit treating plaintiffs' lawyers and their families in an effort to soften trial lawyers' resistance to malpractice reform.

That call ignited a firestorm, leading to intense criticism from lawyers and some doctors who called it unethical and said it takes the debate over malpractice premiums too far. . . .

When the AMA's House of Delegates meets June 12, various AMA committees will sift through hundreds of resolutions that delegates will vote on over the course of the three-day meeting. . . .

The resolutions are typically filed by either medical specialty societies or state associations like the South Carolina Medical Association. In this case, Hawk, an AMA delegate, introduced the proposal himself -- a rare occurrence that happens just once or twice a year, an AMA official said.

How well Hawk's proposal will fare is far from certain. In March, when Hawk made similar comments at the SCMA meeting pushing doctors to drop attorney patients, the association's board made it a point to insist that it didn't endorse the idea.

One board member called Hawk's position "totally off the wall."

Hawk said that in his view, it's not unethical to deny care to patients as long as the doctor is not dealing with a medical emergency and as long as the patient is given 30 days' notice.

Here's the text of Hawk's Resolution 202 (Word file):

AMERICAN MEDICAL ASSOCIATION HOUSE OF DELEGATES

Resolution: 202
(A-04)

Introduced by: J. Chris Hawk, III, MD, Delegate, South Carolina

Subject: Reform of Civil Justice System

Referred to: Reference Committee B
(Michael J. Fischer, MD, Chair)

Whereas, Tort reform has been our number one legislative priority; and

Whereas, Our American Medical Association has been concentrating on MICRA-like reform, particularly a cap on non-economic damages, when in fact we need major reform of the entire civil justice system; and

Whereas, Our current efforts at tort reform have failed at a national level; and

Whereas, We need to get beyond tort reform to other issues that are vital to medicine and our patients; and

Whereas, Patients’ access to medical care has diminished progressively and is likely to continue to do so, due to high malpractice insurance premiums forcing physicians to reduce their scope of practice, relocate, and retire early; and

Whereas, Our Principles of Medical Ethics IX states, “A physician shall support access to medical care for all people”; and

Whereas, If trial attorneys were given the opportunity to experience the access problems caused by the professional liability crisis, then perhaps they would be willing to help change the system; and

Whereas, Our Principles of Medical Ethics VI states, “A physician shall, in the provision of appropriate patient care, except in emergencies, be free to choose whom to serve, with whom to associate, and the environment in which to provide medical care” therefore be it

RESOLVED, That our American Medical Association notify physicians that, except in emergencies and except as otherwise required by law or other professional regulation, it is not unethical to refuse care to plaintiffs’ attorneys and their spouses (New HOD Policy); and

RESOLVED, That our AMA organize a national task force, forum, or town meeting to reform the civil justice system, or get medical professional liability moved to an alternate dispute system, with report back by the 2005 Annual Meeting (Directive to Take Action); and

RESOLVED, That our AMA continue our efforts to reform the US health care system.

Fort Worth Star-Telegram editorial writer Linda Campbell has an eminently sensible response to Dr. Hawk's crusade:

This jaw-dropping measure, presented as a means of addressing diminishing access to health care, laments the medical profession's inability to impose a $250,000 national cap on pain and suffering damages in medical malpractice lawsuits - as though that were the magic antidote for chronically bloated insurance premiums.

Among its whereases, the resolution suggests that "if trial attorneys were given the opportunity to experience the access problems caused by the professional liability crisis, then perhaps they would be willing to help change the system."

So, Hawk believes, the AMA should "notify physicians that, except in emergencies and except as otherwise required by law or other professional regulation, it is not unethical to refuse care to plaintiffs' attorneys and their spouses."

Forget about that Hippocratic oath.

Let's indulge in discrimination according to livelihood - not to mention guilt by marital association.

Hawk told The Post and Courier in Charleston, "My obligation now is to try to improve the system, because we already have patients not getting care."

It requires truly warped logic to imagine that this tactic would advance that cause in any fashion.

If anyone thinks that Hawk's effort is merely an aberration, consider that the Christian Coalition of Alabama recently asked candidates for judicial office whether they would pledge to spurn campaign funding from personal injury trial lawyers, The Birmingham News reported. The organization considers Roe v. Wade an "activist" decision, and judges backed by trial lawyers tend to be "judicial activists," and so, of course, you see the connection.

What all this really accomplishes is to distract from meaningful debate about daunting problems.

Forty-three million Americans remain without health insurance. Many suffer for want of treatment. Someone has to pay to treat them when they get sick. But the cost of medical care climbs.

Medical malpractice insurance companies continue to hike premiums even in states that have limited awards for non-economic damages.

Texas voters last fall approved a constitutional amendment capping non-economic damages, but it hasn't immediately translated into lower malpractice insurance rates for many physicians.

Texas Medical Liability Trust reduced its rates by 12 percent, as promised.

But, late last year, the Joint Underwriting Association asked to raise rates 35 percent for physicians, surgeons and other health care providers and almost 68 percent for hospitals, a request denied by Texas Insurance Commissioner Jose Montemayor.

Yet another insurer, General Electric Medical Protective, switched to an unregulated type of insurance so that it could increase premiums by 10 percent.

In Ohio, malpractice premiums are expected to go up 10 percent to 40 percent this year, even though the state adopted pain-and-suffering caps, "The Advocate" newspaper in central Ohio reported in February.

She ends with a comment that gets to the nub of the problem:

Brooklyn Law School professor Anthony J. Sebok wrote in December that the usual suspects with the loudest voices on America's "liability crisis" miss the point about what needs reforming in the tort system.

"It is so expensive to litigate that few deserving victims sue, and many blameless defendants settle just so they can escape the expense and uncertainty of the civil justice system," he wrote on findlaw.com.

That can't be corrected with simplistic solutions or absurd ethical practices.

Dylan, poet redux.

What are the chances that the holder of the poetry chair at Oxford's latest poetical exegesis would land in 13th place on the Amazon.com bestseller list based on pre-publication sales alone? Pretty good, apparently, if the book gets hyped on page one of The New York Times. Less than 24 hours ago, it was at 109 (and that was a few hours after the Times article hit, so it was probably already reflecting the publicity). By the way, for an even more amazing reality check, the punctuation book, Eats, Shoots & Leaves, is holding steady at #3! What's up, America?

Getting the bad news with the good news about a drug.

Today's Philadelphia Inquirer has a good piece about drug studies that are tubed by the drug companies that sponsor them. Here's the set-up:

A doctor is thinking of trying a new drug on a 67-year-old patient because a study shows it works well in men only slightly younger. But the doctor doesn't know about a clinical trial that found serious side effects in older patients. Those results were never published.

John Schneider, a doctor of internal medicine and a member of the American Medical Association's Council on Scientific Affairs, fears that that scenario happens all too often.

Because drug companies often do not reveal the contents of studies that make their drugs look bad, he said, many doctors are frustrated because they sometimes prescribe medications without knowing all the information about them and possible side effects.

Now, the AMA is considering asking the federal government to open up this secretive world. The group's House of Delegates will vote during a meeting that starts Saturday on a resolution urging the U.S. Department of Health and Human Services to create a registry of all clinical trials and their results.

The power of a front-page story in The Times.

When I put up the message below (less than 3 hours ago), Ricks' book on Dylan was ranked 109. Right now, it's ranked 28. The power of the press, indeed. I wonder what it was ranked yesterday at this time (before the Times piece hit the Web). . . .

Bob Dylan -- master poet.

Christopher Ricks, professor of humanities at Boston University and the newly minted Professor of Poetry at Oxford, has a thing for Bob Dylan, and has published a 500-page tome, "Dylan's Visions of Sin" (Ecco Press), in support of the claim that Dylan is a master poet, according to an article in today's N.Y. Times. The Amazon.com sales rank for this book, which will be officially released on June 15, is already 109. Sometimes it pays to be cool.

Organ trafficking.

There was an interesting piece in yesterday's The Christian Science Monitor on international organ sales. Between this article and the lengthy one in the N.Y. Times Magazine on May 23, this topic is getting a lot of attention these days. Is the U.S. policy against organ sales eventually doomed?

A prescription for healthcare.

Does Harvard's Michael E. Porter have the right idea for reforming the health care system? You can sample his ideas in this story from today's Boston Globe. It summarizes an 18-page piece ("Fixing Competition in U.S. Health Care (HBR Research Report)" by Porter and Elizabeth Olmstead Teisberg) in the June issue of The Harvard Business Review. Here's HBR's description of the piece:

The U.S. health care system is in bad shape. Medical services are restricted or rationed, many patients receive poor care, and high rates of preventable medical error persist. There are wide and inexplicable differences in costs and quality among providers and across geographic areas. In well-functioning, competitive markets, such outcomes would be inconceivable. In health care, these results are intolerable. Competition in health care needs to change, say the authors. It currently operates at the wrong level. Payers, health plans, providers, physicians, and others in the system wrangle over the wrong things, in the wrong locations, and at the wrong times. System participants divide value instead of creating it. (And in some instances, they destroy it.) They shift costs onto one another, restrict access to care, stifle innovation, and hoard information--all without truly benefiting patients. This form of zero-sum competition must be replaced by competition at the level of preventing, diagnosing, and treating individual conditions and diseases. Among the authors' well-researched recommendations for reform: Standardized information about individual diseases and treatments should be collected and disseminated widely so patients can make informed choices about their care. Payers, providers, and health plans should establish transparent billing and pricing mechanisms to reduce cost shifting, confusion, pricing discrimination, and other inefficiencies in the system. And health care providers should be experts in certain conditions and treatments rather than try to be all things to all people. U.S. employers can also play a big role in reform by changing how they manage their health benefits.

HHS OIG publishes draft revised hospital compliance guidance.

In today's Federal Register we have the latest addition to the growing body of "compliance guidance" from the Office of Inspector General, this time in the form of changes to the previously published hospital compliance guidance (63 Fed. Reg. 8987 (February 23, 1998)). All of the OIG compliance guidance documents are collected here.

According to the preamble,

When the final version of this document is published, it will supplement the OIG’s prior compliance program guidance for hospitals issued in 1998. This draft contains new compliance recommendations and an expanded discussion of risk areas. The draft takes into account recent changes to hospital payment systems and regulations, evolving industry practices, current enforcement priorities, and lessons learned in the area of corporate compliance.

Among other things, the draft revises the OIG's list of compliance "risk areas":

This section addresses the following areas of significant concern for hospitals: (A) Submission of accurate claims and information; (B) the referral statutes; (C) payments to reduce or limit services; (D) the Emergency Medical Treatment and Labor Act (EMTALA); (E) substandard care; (F) relationships with Federal health care program beneficiaries; (G) HIPAA Privacy and Security Rules; and (H) billing Medicare or Medicaid substantially in excess of usual charges. In addition, a final section (I) addresses several areas of general interest that, while not necessarily matters of significant risk, have been of continuing interest to the hospital community.

Final section (I) discusses (1) discounts to uninsured patients, (2) preventive care services, and (3) professional courtesy.

Pfizer pleads guilty to marketing drug illegally.

While doctors can prescribe drugs for any use, the promotion of drugs for these so-called "off-label uses" is prohibited. The FDA's guidance in this area is relatively clear, although the agency has been somewhat constrained by a federal district court (Washington Legal Foundation v. Friedman (requires WestLaw subscription)). So it was a big deal when Pfizer admitted in a Boston case yesterday that it had engaged in just such illegal marketing, including paying doctors to put their names on ghostwritten articles about the anti-seizure drug Neurontin. The Boston Globe's article is here.

Pediatric deaths due to error - Report.

As reported in today's Daily Dose, Pediatrics has published an article (link is to abstract only) that estimates thousands of pediatric patients die each year due to medical error:

Thousands of children die unnecessarily in hospitals because of medical errors stemming from patient-safety lapses, and the extra cost of care for pediatric patients exposed to 20 types of safety problems exceeds $1 billion annually, according to a study in the June Pediatrics. The study confirmed that medical errors are a significant problem for children as well as adults, and it identified the very young and the very poor as more vulnerable than children in general. Researchers from the department of pediatrics at Johns Hopkins University, Baltimore, said the figures on patient deaths were conservative. The methods used to identify 4,483 unnecessary deaths from an analysis of 5.7 million records in 2000 "can detect only a small portion of the types of patient safety events that actually happen in hospitals," according to the article.

More than 51,000 cases of medical error were discovered, and four of the 20 types of treatment failure occurred at a rate exceeding 100 per 10,000 discharges. Those were failure to rescue a patient suffering from a threatening event, postoperative sepsis, and obstetric trauma with and without the use of instrumentation. The study also recorded the financial cost of each of the 20 types of treatment failure. For example, each case of sepsis resulted in an average of 26 extra hospital days and $118,000 in extra charges.

The abstract concludes: "Patient safety problems for hospitalized children occur frequently and with substantial impacts to our health care industry. Unmeasurable by this study are the additional "costs" and "burdens" of safety events that our patients are forced to handle. Additional work to describe and quantify better these outcomes in addition to ones measured here can help solidify the "business case" for patient safety efforts."

Washington Post analyzes Kerry's health plan.

In its Saturday issue, The Washington Post ran an article by Ceci Connolly on the Kerry health plan. In the "we've heard this before" category, the plan seeks to obtain health-care savings (and therefore reduced premiums, and therefore more coverage for the working uninsured) through electronic medical records and disease-management requirements. The plan would also position the federal government as payor of last resort for catastrophic claims, in much the same role as it plays as ultimate reinsurer after natural disasters and terrorist attacks. The federal government would pay employers 75% of the cost of "catastrophic claims," defined as a single employee's claims over $50,000 in any one year. As Connelly notes: "Such catastrophic claims account for less than half of 1 percent of all claims but generate 20 percent of the nation's health care costs, according to the latest federal data." The relief felt by employers, insurers, and employees (hopefully) would come at a cost: "In exchange for the benefit, Kerry would require employers to offer insurance to every worker and to provide health programs that detect and manage chronic illnesses such as high blood pressure early enough to prevent the diseases from worsening." And the federal tab? "Emory University health economist Kenneth E. Thorpe estimates the reinsurance program would save businesses and employees $288 billion in premiums over a decade but cost the government $257 billion because of administrative reductions." Most of that price would be covered by rolling back tax breaks delivered to the wealthy after the 2002 mid-term elections.