Tuesday, June 29, 2004

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.

Monday, June 28, 2004

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.

Sunday, June 27, 2004

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.

Friday, June 25, 2004

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.

Thursday, June 24, 2004

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.

Wednesday, June 23, 2004

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:

Tuesday, June 22, 2004

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.

Monday, June 21, 2004

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.

Sunday, June 20, 2004

Living wills under fire.

It sounds like the old rap on living wills is being recycled. According to an article in the June 21 Newsday, experts are weighing in on the disutility of living wills. The old rap: (1) Writers of living wills have a hard time predicting with any precision the diagnosis and treatment options that will be their actual end-of-life reality, and so the document has almost no chance of addressing the actual decisions their surrogate decision makers will be confronted with. (2) Considering the imprecision of patient predictions, as well as the limits of language, living wills present sometimes insurmountable interpretive difficulties. (3) And in any event, hospitals seldom know about the existence of a patient's living will until after life-sustaining treatment has been started. In brief: living wills are often too little, too late.

The new rap:
Recently, two University of Michigan researchers, writing in the bimonthly Hastings Center Report, a journal that examines issues in medical ethics, concluded that living wills are useless.

"It's very hard for people to predict their preferences for an unknown health condition," said Angela Fagerlin, a research scientist and co-author of the article. In addition, "decision makers have a difficult time interpreting [living wills]," Fagerlin said.

And Carl Schneider, a law professor and Fagerlin's co-author, says: "In lots of ways, the unsolvable problem is that writing down your intentions clearly is a lot harder than people think it is."
Sound familiar?

Fact is, living wills were never the end-all and be-all of end-of-life decision making, but the weaknesses of the document can be overdrawn. They help the executor and her family get into a discussion mode that will help end-of-life decision making when the time comes. They can, therefore, help surrogate decision makers -- including those holding a medical power of attorney -- take on the emotion and psychological burden of decision making.

Would we be in a world of hurt if living wills were eliminated? No. Can their utility be over-estimated? Sure. But do they serve a potentially valuable function? I think so.

Med mal reform: speaking truth to power.

Bob Herbert nails the problem with med mal reform in the last third of an 800-word column that will appear in this morning's (6/21) N.Y. Times:
[T]he problem when it comes to malpractice is not the amount of money the insurance companies are making (they're doing fine) or the rates the doctors have to pay, but rather the terrible physical and emotional damage that is done to so many unsuspecting patients who fall into the hands of careless or incompetent medical personnel.

What is needed is a nationwide crackdown on malpractice, not a campaign to roll back the rights of patients who are injured. This is another utterly typical example of the Bush administration going to bat for those who are economically and politically powerful against those who are economically and politically weak.

Despite claims by the insurance industry, there is no evidence that soaring malpractice premiums are the result of sharp increases in the amounts of money paid out for malpractice claims. And, tellingly, industry executives are generally careful not to say that the tort reforms sought by the Bush administration will result in premium reductions.

This is all about greed. What tort reform will lead to, not surprisingly, is an unwarranted burst of additional profits for the insurance industry, which is why the industry is sinking so much money into its unrelenting campaign for "reform."

It would be helpful if the nation's many good doctors would blow the whistle on the insurance industry and its exploitive practices, and on the members of their own august profession who violate that essential maxim, "First, do no harm."

Boutique medicine comes to the Hamptons, big-time.

I've written about boutique medicine elsewhere (5Aug03, 14Aug03) - the practice by which a physician or group will charge an annual premium in return for which they will promise to return calls promptly, not keep the patient waiting in the waiting room, and generally provide the quality of care dinosaurs like me remember from the '50's. Today's N.Y. Times has an interesting opinion piece on the practice, but with a twist. Now it's a local hospital that's going boutique, and it's the emergency room where the rich are going to catch a break, if they've already paid the upfront fee. As the paper reports,
The 95-year-old financially ailing Southampton Hospital - the only serious medical emergency center on the South Fork - is offering a plan aimed at wealthy summer visitors whose primary doctors are back in Manhattan and out of reach, presumably along with the hospital's sense of propriety. For $6,000 per family, or $3,800 for individuals, not including doctors' fees, cardholders in the Southampton PLUS plan are entitled to "priority access" to medical care at the hospital from May 28 to Sept. 26. A brochure about the plan was mailed to several thousand summer homeowners from a mailing list the hospital purchased from a source it declined to identify.

Southampton Hospital lets you know that it understands what a drag all this messy medical stuff can be when you're on a busy summer weekend, careening from tennis lesson to benefit to cocktail party with nary a moment to waste sitting around a hospital emergency room. Since "a visit to the emergency department is gut-wrenching enough without the added frustration of filing out multiple forms," the brochure commiserates, PLUS members are pre-registered, which includes being met at the door of the hospital "by a member of the hospital's senior staff." The brochure confides, "You shouldn't have to wait around where your health is concerned,'' and adds, "While we can't guarantee you'll be seen first, we'll do everything possible to get you in and out fast." The plan covers not only family members, but also weekend house guests and "hired help," as the brochure so quaintly describes what must be the au pair.

The PLUS plan motto? "Peace of mind, all summer long." That is, if you're flush.
As the author points out, and the hospital has lately realized, "[i]t is, of course, illegal to give someone priority for medical care because of a cash payment in an emergency room. Since the controversial brochure was mailed, hospital officials have gone to great pains to say that PLUS plan members will have to wait their turn in line with hoi polloi. The plan has been greeted with howls of protest from local doctors, including a Southampton Hospital admitting doctor, Robert Semlear, who told a local newspaper he found the PLUS program 'morally repugnant' and 'elitist.'"

Testing for fetal defects.

Good article in today's N.Y. Times on testing for fetal defects. The ethical issue is an interesting one, succinctly described in the article this way:
The wider range and earlier timing of prenatal tests are raising concern among some bioethicists and advocates for disability rights who argue that the medical establishment is sending a message to patients that the goal is to guard against the birth of children with disabilities.

"By putting them out there as something everyone must do, the profession communicates that these are conditions that everyone must avoid," said Adrienne Asch, a bioethicist at Wellesley College. "And the earlier you can get it done the more you can get away with because you never have to tell anybody."

Some doctors, too, say they are troubled by what sometimes seems like a slippery slope from prenatal science to eugenics. The problem, though, is where to draw the line.

Saturday, June 19, 2004

Mixing Morals With Education?

Well, as a teacher of bioethics at a Methodist school with a Center for Ethics and Public Responsibility, the debate over whether ethics has any place in a higher education curriculum is, to put it mildly, more than mildly interesting. The debate is set out well in Saturday's "Beliefs" column by Peter Steinfels in The New York Times.