Negative trial results and Big Pharm.

As previously noted here, PhRMA (the pharmaceutical industry association) responded to the rising tide criticism from physicians, consumers, and politicians by proposing guidelines for the release of clinical-trial results when those results are unfavorable.

The NY Attorney General Eliot Spitzer went after Glaxo SmithKline for just such secrecy, resulting in a settlement announced August 26. Pursuant to the settlement, Glaxo will establish a "Clinical Trials Register" containing "all scientifically sound information" -- including both positive and negative results. Although Glaxo denies the allegations, Spitzer accused Glaxo of "[withholding] negative information about Paxil, a drug used to treat depression. Specifically, GSK conducted at least five studies on the use of Paxil in children and adolescents but only released one of these studies, which showed mixed results on efficacy. The lawsuit alleged that the company suppressed the negative results of the other studies, which failed to demonstrate that Paxil is effective and which suggested a possible increased risk of suicidal thinking and acts in certain individuals. The suit further alleged that GSK failed to disclose this information in 'Medical Information Letters' that it sent to physicians."

Now the Sept. 6 N.Y. Times reports that Merck & Co. has announced its intention of posting the same type of information on a government web site, ClinicalTrials.gov. According to the article:

The company has a history of publishing clinical trials even when the results reflected poorly on its drugs. And its announcement that it has already posted its results on ClinicalTrials.gov is, in part, an effort to make that Web site the standard for the rest of the industry.

ClinicalTrials.gov was created to provide patients suffering from deadly diseases a registry of trials of experimental treatments. Merck's move significantly expands the purpose and scope of the Web site's offerings.

Despite Merck's action, some in Congress say there is still a need for legislation that would require such public postings.

The article adds that Sen. Ted Kennedy is expected to introduce such legislation as early as this week.

Meanwhile, a House subcommittee is scheduled to hold hearings on the subject this week and later this month. The Subcommittee on Oversight and Investigations of the House Committee on Energy and Commerce has scheduled hearings on September 9 ("Publication and Disclosure Issues in Anti-Depressant Pediatric Clinical Trials") and Sept. 23 ("FDA's Role in Protecting the Public Health: Examining FDA's Review of Safety & Efficacy Concerns in Anti-Depressant Use by Children").

Torture and medicine.

I've been remiss in failing to post a comment on the recent article (in the August 21 issue of the British medical journal, The Lancet) by Minnesotan Steven H. Miles, M.D., entitled "Abu Ghraib: its legacy for military medicine" (available for free). It is a stinging indictment of military physicians, PAs, nurses, and medics who persistently and conspicuously violated the Geneva Conventions by tending to the injuries of inmates so that they could be returned to the guards who were mistreating and torturing them. The Defense Department's blanket denial, on closer inspection, appeared to consist of an attack on Miles' sources. Before this is all over, I am willing to bet that the complicity of military medical personnel will be even more extensive, and appalling, than Miles was able to document.

Pediatric ethics & drug studies.

As reported in today's Olympia (Wash.) Olympian, the FDA's Pediatric Ethics subcommittee will meet on Sept. 10 to discuss whether "[i]t is ethical in the name of science to give a healthy child as young as 9 a controlled substance." The story continues:

The research, proposed by the National Institute of Mental Health, includes healthy children among 9- to 18-year-olds who would receive a single 10 mg. dose of dextroamphetamine.

The hoped-for payoff for research: A better understanding of how healthy brains work differently from those of children diagnosed with attention deficit hyperactivity disorder.

The payoff for families: $570.

The study would look at the effects of dextroamphetamine (the active ingredient in Dexedrine and Adderall) . It is similar to a study (by Judith L. Rapoport, chief of child psychology at the National Iinstitute of Mental Health) 20 years ago, which found increases in attention span regardless of whether the child-subject had ADHD. The new study would be similar, but it would add an MRI to map brain responses to the drug. Despite the similarities between the two studies,

review boards that balance risk vs. scientific gain have changed dramatically in 20 years.

Indeed, an NIH review panel met twice and was unable to reach a consensus whether risk to healthy volunteers would be too high in the new study. They kicked the sensitive matter over the FDA's new pediatrics ethics subcommittee.

The scientific merit of the study -- which will include 14 children with ADHD, 14 healthy children, 12 pairs of identical twins, and 12 pairs of fraternal twins -- was confirmed by a NIMH panel last year. But a safety panel was concerned about exposing healthy children to a Class 2 controlled substance, the potential for future drug abuse after the experimental exposures, and the possibly coercive effect of a $570 payment to each participant in the 11-hour study. From past studies, we also know "[t]he most common side effects among healthy children given a single dose of the stimulant in past experiments was temporary insomnia and poor appetite. One brain-damaged child exposed to the medication suffered hallucinations."

So where would your average institutional review board come down on the question if presented with this research protocol?

Many ethicists expect the FDA subcommittee to use a primary litmus test: Does taking the stimulant pose more than a minimal increase to risks that healthy children face in everyday life?

Pearl O'Rourke, who oversees human research affairs, interviewed the heads of six review boards at Massachusetts General and Brigham and Women's Hospital.

"Five said they would not approve this study. And all five said, 'But we wish we could,"' O'Rourke said during a March 3 NIH discussion.

O'Rourke acknowledged that the review boards struggle with murky federal regulations, tightening case law, financing agencies that prefer pediatric studies and the threat of negative media coverage.

"I live in dread fear of what's going to be on the front page of the paper," she told the audience. "So, when I heard this, three things hit my mind: Kids, ohmigod! Psychiatric disease. And a class 2 drug."

The impact of federal regulations and increased numbers of lawsuits is not small thing:

The FDA panel could simply approve the plan if it should find it carried great scientific weight, said Dr. Douglas Diekema, director of medical ethics at Children's Hospital in Seattle.

New Jersey attorney Alan C. Milstein said that would be the wrong call.

Milstein, who represented the family of an 18-year-old whose death in 1999 spurred greater federal oversight of gene therapy trials, pointed to a recent Maryland Supreme Court ruling. The court held that exposing healthy children to higher-than-minimum risk in a medical study is unethical.

"They can't do this study. It doesn't take a genius to figure out why they can't do it," Milstein said. "I can't believe that anybody is going to say it's ethical to do this. It's not even a close call."

Extensive briefing materials for the Pediatric Ethics Subcommittee's Sept. 10 meeting are here. And a recent review article in the August 28 issue of The Lancet (Caldwell et al., "Clinical Trials in Children," Lancet 2004;364:803-11 [subscription required]) takes a good look at the topic from all sides. Here's the abstract:

The imperative to undertake randomised trials in children arises from extraordinary advances in basic biomedical sciences, needing a matching commitment to translational research if child health is to reap the benefits from this new knowledge. Unfortunately, many prescribed treatments for children have not been adequately tested in children, sometimes resulting in harmful treatments being given and beneficial treatments being withheld. Government, industry, funding agencies, and clinicians are responsible for research priorities being adult-focused because of the greater burden of disease in adults, coupled with financial and marketing considerations. This bias has meant that the equal rights of children to participate in trials has not always been recognised. This is changing, however, as the need for clinical trials in children has been increasingly recognised by the scientific community and broader public, leading to new legislation in some countries making trials of interventions mandatory in children as well as adults before drug approval is given. Trials in children are more challenging than those in adults. The pool of eligible children entering trials is often small because many conditions are uncommon in children, and the threshold for gaining consent is often higher and more complex because parents have to make decisions about trial participation on behalf of their child. Uncertain about what is best, despite supporting the notion of trials in principle, parents and paediatricians generally opt for the new intervention or for standard care rather than trial participation. In this review, we explore issues relating to trial participation for children and suggest some strategiesfor improving the conduct of clinical trials involving children.

Class-action suit by 600K docs against 6 insurers.

I don't see anyone else reporting this story, but according to a story in Thursday's N.Y. Times by Milt Freudenheim,"[a]n appeals court upheld class-action status yesterday for a lawsuit brought on behalf of at least 600,000 doctors contending that six of the nation's largest health insurers regularly reduce payments for medical services. . . . A three-judge panel of the United States Court of Appeals for the 11th Circuit, in Atlanta, ruled that the defendants . . . must stand trial on charges of violating the federal Racketeering Influenced and Corrupt Organizations Act, or RICO. [Private civil RICO actions are authorized by 18 U.S.C. § 1964(c).] Health insurance lawyers had said that the appeals panel ruling would be crucial to the case's outcome."

Indeed. The article quotes Stephanie Kanwit, "a lawyer for a health insurance trade association in Washington [America's Health Insurance Plans], [who] said last December that 'class action is absolutely the crucial issue.' She added that the doctors' cases were 'not provable on a case-by-case basis.'"

That's how the 11th Circuit panel saw it, too: "In their suit, the doctors argue that the companies wrongfully underpaid them in various ways, including the use of computer programs that routinely denied parts of their fees. After reviewing the accusations, the appeals panel said, 'It is ridiculous to expect 600,000 doctors across the nation to repeatedly prove these complicated and overwhelming facts.'"

My usual links for free access to the court's opinion (Klay v. Humana, Inc.) -- FindLaw, 11th Cir. homepage -- aren't producing the slip opinion. By the time you are reading this, I hope the links are working. (For WestLaw subscribers, this is the link: 2004 WL 1938845.)

Bioethics council's report card.

The Boston Globe's Raja Mishra wrote an article in Tuesday's paper ("President Bush's bioethics panel has little influence") that assesses the President's Council on Bioethics at the 33-month mark. Mishra's central observations:

The presidential order establishing the council gave the panel two major mandates: To help guide the president in biomedical policy-making and to provide a national forum for discussing these issues. In three years, Bush asked for guidance on a single issue, embryo cloning, then formulated his policy against it months before the council had an opportunity to weigh in. Otherwise, Bush had virtually no interaction with the council, leaving it to explore a set of intriguing issues that lacked clear policy implications.

The council's work led to no federal legislation, a point acknowledged by its chairman, bioethics scholar Dr. Leon R. Kass.

Art Caplan, director of the bioethics program at UPenn, put his finger on the problem pretty well: ''I don't see them as having accomplished much. They issued some reports, most of which turned out to be post facto justifications for the president on stem cells and cloning. . . . They haven't had anything to say about Americans lacking health insurance, research in the Third World, drug pricing. They've been off solely in esoterica."

Of course, part of the reason behind Caplan's observation is that stem cells and cloning have been the major bioethics topics on Congress' plate the past few years, along with late-term abortions. And although the Council's work may have taken on a distinctly academic cast, Kass argues that the Council's scholarly work may pay off down the road. Meanwhile, Mishra's final grade isn't merely a disappointment for those who hoped for more from this Council, but a verdict on a major missed opportunity: "But the council, three years later, has become an afterthought -- with little impact on public debate and virtually no discernable influence on Congress or its creator, President George W. Bush."

Schiavo case: report on oral argument

There are a few reports on yesterday's oral argument before the Florida Supreme Court on the constitutionality of "Terri's Law":

A file report from the Associate Press (courtesy of the Winston-Salem Journal) reports (Sept. 1): Justice Charles Wells said he was troubled because he had to conclude that 'Terri's Law,' passed last October, was intended to sidestep a trial-court ruling that found 'clear and convincing evidence' that Schiavo would not want to be kept alive artificially." The Governor's attorneys, on the other hand, argued that "'[t]he legislature gave this power to the governor because the governor ... is the ultimate defender of people's civil rights in the state,' and "that the courts do not have the 'exclusive domain' of protecting the rights of disabled people."

The N.Y. Times' Abby Goodnough reports in today's paper:

The seven justices appeared especially troubled that "Terri's Law" was written to apply only to Mrs. Schiavo. Courts are often skeptical of legislation that applies to only one person, raising questions of denial of equal protection and due process.

The justices also focused on the fact that the law did not require the governor to abide by any standards or procedures, as he is required to do when ordering stays of execution in capital punishment cases.

"The Legislature stepped in here and reversed a decision that was final," Justice Charles Wells said.

And the AP also reports (courtesy of the Sarasota Herald-Tribune) that the appellate judge in the Second Circuit Court whose rulings have consistently favored the legal positions of Michael Schiavo against the claims of his wife's parents coasted to re-election yesterday by a comfortable 64-36 margin (with 30 percent of the precincts reporting).

Keillor on Democrats and Republicans.

Want to know what this election is about? I'd tell you, but Garrison Keillor's done a much better job of it than I can. Amen, Brother Garrison!

Schiavo case to be argued in Fla, Supreme Court today.

As reported in a long, detailed article by Laurie Cunningham in today's Miami Daily Business Review, the Florida Supreme Court will hear oral argument today in Michael Schiavo's challenge to the constitutionality of Terri's Law. A Florida appellate court decided against the state and struck down the statute earlier this year. Earlier discussions on this blog of the litigation and the various opinions can be found here, here, and here.

I never predict outcomes in Supreme Court cases, state or federal, but I will go out on a limb here: Michael Schiavo will win this by a squeaker - perhaps as close as a one-vote margin (with Bush appointees siding with their governor).

Doc wins $366 miilion in peer-review verdict.

It may be the largest verdict in Dallas history: $366 million It has to be the largest plaintiff's verdict in a peer-review case by a physician anywhere, any time. As reported in the Dallas Morning News on Sunday, an interventional cardiologist whose privileges to perform cardiac catheterizations and echocardiograms were temporarily suspended and then reinstated after a panel of national experts defended the quality of the physician's work. Claiming that the temporary suspension harmed his reputation, shrunk his practice, and led to another hospital's decision to deny his application for privileges, the physician sued and won on a variety of claims, including breach of contract, defamation, interference with contractual relations and intentional infliction of emotional distress. (His antitrust claims were dismissed by the judge last fall.) You can view the instructions and verdict form here.

It is impossible to tell, without reviewing the trial record, whether the plaintiff deserved to win this case. His burden was a high one. To get around the immunities provided by the federal Health Care Quality Improvement Act, he had to persuade the jury that the hospital and the physicians who participated in the peer-review action lacked a good-faith belief that its actions were necessary to protect patient health and safety. To win on most of the state-law claims, he had to persuade the jury that the physicians and hospital acted out of malice. The jury form makes it clear that the jury believed his version of the facts with respect to these issues.

It is also impossible to tell, without reviewing the trial record, what could possibly entitle a physician to an award of a third of a billion dollars for the temporary suspension of some of his staff privileges while the hospital looked into the question whether a string of adverse outcomes was nothing more than bad luck or signalled a deeper problem.

But one thing is for sure: This verdict (whether or not it is reduced by the trial judge, and whether or not it is reversed on appeal) will cast a very chilly pall over the peer review activities of hospitals in Dallas County (and elsewhere) and will lead otherwise public-spirited physicians to question whether peer review's gains are worth the personal legal and financial risk.

The Decision of a Lifetime (washingtonpost.com).

Last Saturday The Washington Post published an interesting essay by its long-time chief diplomatic correspondent, Chalmers M. Roberts, whose byline began appearing in the paper in 1949 (the year I was born), who retired in 1971 (the year I graduated from his college and mine), and who in 2004 has appeared for what may well be, at age 93, his last appearance in the pages of the paper he has served so for so long and so well.

The subject wasn't the Iraq war (truth be told, the story there is the lack of diplomacy displayed by the administration of Bush/43) or other international comings and goings, but rather it was Mr. Roberts' heart. Or, more accurately, his aortic valve, which -- like a lot of the rest of his body -- is starting to give out on him. The immediate issue that needed to be addressed this summer was whether to have open-heart surgery, which his cardiologist recommended, to replace the worn-out valve with a porcine one.

Roberts decided against the operation. His reasons display a, well, mature approach to aging and loss and the inevitability of death that strikes me as refreshing and increasingly rare. So much of what I see and deal with on hospital ethics committees arises from the exact opposite instinct: to fight against the inevitable no matter how long the odds are or how remote the chances of "victory." Winning, in Mr. Roberts case, consists in taking satisfaction in a life well lived (interesting career, happy and loving children, a 60-year marriage) and facing the end with equanimity and grace. This essay is a good reminder that "death with dignity" takes its meaning primarily from the goal of "living with dignity," and Mr. Roberts' example is a well-timed and generous one.

Wrongful death claims and the stillborn fetus.

Thanks to Austin friend Louise Joy for alerting me to this case, handed down Thursday by the Texas Supreme Court:

In Fort Worth Osteopathic Hosp., Inc. v. Reese, No. 02-1061, the court held that its ruling in Witty v. Am. Gen. Capital Distrib., Inc., 727 S.W.2d 503 (Tex. 1987) (holding that the statutory wrongful death cause of action does not allow recovery for a stillborn fetus) does not violate the Texas Constitution.

Interestingly, the majority refuses to overrule Witty, primarily because the Legislature codified most of the Witty rule last year. The 78th Legislature amended the definition of "individual" in the wrongful death statute (Tex. Civ. Prac. & Rem. Code § 71.001(4)) to include “an unborn child at every stage of gestation from fertilization until birth,” but as the court notes in Reese, "the statute expressly does not apply to claims 'for the death of an individual who is an unborn child that is brought against . . . a physician or other health care provider licensed in this state, if the death directly or indirectly is caused by, associated with, arises out of, or relates to a lawful medical or health care practice or procedure of the physician or health care provider,'” id. § 71.003(c)(4).

Thus, the court sticks to the Witty rule, which leaves the court with the question whether the exclusion of stillborn fetuses violates the Texas Constitution's equal protection provision (Art. I, § 3). The court concludes that it does not, principally on the ground that, because the U.S. Supreme Court ruled in Roe v. Wade that a fetus is not a "person" for purposes of the 14th Amendment, neither does it enjoy legal protections under the Texas Constitution. The opinion is notable for the utter lack of reasoning in support of its conclusion, other than noting that the law has ever been so. Other states (Maryland, Florida, California) and the Third Circuit agree.

The majority opinion is here. Justice O'Neill's concurring opinion reluctantly agrees with the majority that 17 years of legislative silence (plus 2003's amendments to the wrongful death law) amounts to acquiescence in the Witty rule. Justice Smith's dissenting opinion disagrees with every jot and tittle of the majority's ruling - both the statutory analysis and the equal protection ruling.

Times' obit for Kübler-Ross

Lots more detail than the early AP newswire story: click here. Here's an odd note:

In the later part of her career, she embarked on research to verify the existence of life after death, conducting, with others, thousands of interviews with people who recounted near-death experiences, particularly those declared clinically dead by medical authorities but who were then revived. Her prestige generated widespread interest in such research and attracted followers who considered her a saint.

But this work aroused deep skepticism in medical and scientific circles and damaged her reputation. Her claims that she had evidence of an afterlife saddened many of her colleagues, some of whom believed that she had abandoned rigorous science and had succumbed to her own fears of death.

A great teaching moment:

In 1962, she became a teaching fellow at the University of Colorado School of Medicine in Denver. A small woman, who spoke with a heavy German accent and was shy, despite extraordinary inner self-confidence, she was highly nervous when asked to fill in for a popular professor and master lecturer. She found the medical students rude, paying her scant attention and talking to one another as she spoke.

But the hall became noticeably quieter when she brought out a 16-year-old patient who was dying of leukemia, and asked the students to interview her. Now it was they who seemed nervous. When she prodded them, they would ask the patient about her blood counts, chemotherapy or other clinical matters.

Finally, the teenager exploded in anger, and began posing her own questions: What was it like not to be able to dream about the high-school prom? Or going on a date? Or growing up? "Why," she demanded, "won't people tell you the truth?" When the lecture ended, many students had been moved to tears.

"Now you're acting like human beings, instead of scientists," Dr. Kübler-Ross said.

Her wisdom and tenacity paid off: "Her lectures began to draw standing-room-only audiences of medical and theology students, clergymen and social workers — but few doctors."

The real revolution, the one that occurred among physicians, started to take root in 1965 when

she became an assistant professor in psychiatry at the University of Chicago Medical School, where a group of theology students approached her for help in studying death. She suggested a series of conversations with dying patients, who would be asked their thoughts and feelings; the patients would teach the professionals. At first, staff doctors objected.

The change in professional attitudes came slowly:

To bring public pressure for change in hospitals' treatment of the dying, she agreed to a request by Life magazine in 1965 to interview one of her seminar patients, Eva, who felt her doctors had treated her coldly and arrogantly. The Life article prompted one physician, encountering Dr. Kübler-Ross in a hospital corridor, to remark: "Are you looking for your next patient for publicity."

The hospital said it wanted not to be famous for its dying patients but rather for those it saved, and ordered its doctors not to cooperate further. The lecture hall for her next seminar was empty.

"Although humiliated," she said, "I knew they could not stop everything that had been put in motion by the press." The hospital switchboard was overwhelmed with calls in reaction to the Life article; mail piled up and she was invited to speak at other colleges and universities.

Not that this helped Eva much. Dr. Kübler-Ross said she looked in on her years later and found her lying naked on a hospital bed, unable to speak, with an overhead light glaring in her eyes. "She pressed my hand as a way of saying hello, and pointed her other hand up toward the ceiling. I turned the light off and asked a nurse to cover Eva. Unbelievably, the nurse hesitated, and asked, `Why?' " Dr. Kübler-Ross covered the patient herself. Eva died the next day.

"The way she died, cold and alone, was something I could not tolerate," Dr. Kübler-Ross said. Gradually, the medical profession came to accept her new approaches to treating the terminally ill.

Five Stages of Grief.

The AP story on the death of Elisabeth Kübler-Ross reminds me of a poem that we read in Law, Literature & Medicine, "The Five Stages of Grief" by Linda Pastan:

The night I lost you
someone pointed me towards
the Five Stages of Grief.
Go that way, they said,
it's easy, like learning to climb
stairs after the amputation.
And so I climbed.
Denial was first.
I sat down at breakfast
carefully setting the table
for two. I passed you the toast--
you sat there. I passed
you the paper--you hid
behind it.
Anger seemed more familiar.
I burned the toast, snatched
the paper and read the headlines myself.
But they mentioned your departure,
and so I moved on to
Bargaining. What could I exchange
for you? The silence
after storms? My typing fingers?
Before I could decide, Depression
came puffing up, a poor relation
its suitcase tied together
with string. In the suitcase
were bandages for the eyes
and bottles of sleep. I slid
all the way down the stairs
feeling nothing.
And all the time Hope
flashed on and off
in defective neon.
Hope was a signpost pointing
straight in the air.
Hope was my uncle's middle name,
he died of it.
After a year I am still climbing,
though my feet slip
on your stone face.
The treeline
has long since disappeared;
green is a color
I have forgotten.
But now I see what I am climbing
towards: Acceptance
written in capital letters,
a special headline:
Acceptance,
its name in lights.
I struggle on,
waving and shouting.
Below, my whole life spreads its surf,
all the landscapes I've ever known
or dreamed of. Below
a fish jumps: the pulse
in your neck.
Acceptance. I finally
reach it.
But something is wrong.
Grief is a circular staircase.
I have lost you.

Pastan talks about her work here (20MB sound file; 43:21). Interestingly, she says she wrote the poem when a friend was going through a divorce and it occurred to her that the friend's progress through the divorce resembled Kübler-Ross' five stages of grief.

Kübler-Ross dies.

Elisabeth Kübler-Ross, the path-breaking psychiatrist who wrote On Death and Dying (1969) and whose "fve stages of grief" is taught in every medical school, died Tuesday in Scottsdale at the age of 78. The AP report is here. Kübler-Ross mined a very rich vein of scholarship after her early classic appeared, including such titles as:

• On Life After Death
• Living With Death and Dying
• Life Lessons: Two Experts on Death and Dying Teach Us About the Mysteries of Life and Living
• The Wheel of Life : A Memoir of Living and Dying

In addition to her support for the hospice movement, her writings did more than anyone's to make death and dying a socially acceptable topic for discussion, leading to the advance-directive movement and to the appearance of bestsellers like Sherwin Nuland's How We Die: Reflections on Life's Final Chapter.

Nonprofit hospitals' billing practices examined.

There's a good article by Roger Yu in this morning's Dallas Morning News (requires free subscription) that gets into more of the details of hospitals' billing practices than the USA Today article does. The opening paragraphs tell the story pretty well:

Uninsured and diagnosed with liver cirrhosis, Elaine Sawyer entered the Mayo Clinic in Jacksonville, Fla.

A month later, doctors determined a transplant wouldn't help. She and her husband, Dempsey Sawyer, returned home to McKinney in June with a terminal diagnosis and a hospital bill for $225,000.

Had Mrs. Sawyer, 63, had health coverage, her family might have been responsible for a modest co-payment, and an insurance company would have paid a discounted price – perhaps tens of thousands of dollars less.

"I've talked to some medical people, and they said some of those charges are ridiculous," said Mr. Sawyer, 69, a retired high-tech worker, who borrowed money to pay $190,000 of the bill.

It's not that hard to see how the hospitals got into this situation. First, they have their standard fees - often 3 to 4 times their actual costs. This is the amount that indemnity-type health insurance plans and the uninsured were usually charged. Hardly anyone has an indeminity plan any more: they've been priced beyond the reach of most Americans, for this very reason. Managed care plans exist for basically one reason: to negotiate discounted fees for their insureds. Their rates average about 13 percent above cost (though averages are a bit misleading) and Medicare has legislated itself a sweet deal of 1 percent (on average) above cost.

So who's left paying the full charges? The uninsured. "Paying" may be a misnomer. That's the amount they are billed. Very few pay the full bill and many pay nothing. But that doesn't stop the hospitals from sending bills and trying to collect. As well they should. I believe that, as good stewards of the public's tax subsidy for their operations, nonprofit hospitals have an obligation to take reasonable steps to bill and collect for the services they render.

Is there any relief for the truly indigent? Yes, some. As the article points out:

"It's important to understand that a hospital charges patients the same amount regardless of the type of insurance," said Carmela Coyle, policy analyst with American Hospital Association.

Hospitals in Texas say they can't lower charges for the uninsured because state law prohibits them from knowingly charging more to individuals who have insurance.

The Texas Department of Insurance says this law doesn't apply to Medicare and Medicaid patients or to the "medically indigent."

Patients who qualify for the label "medically indigent" can get a break. All others get the full billed charge, even though a lot of those charges get written off as bad debt after collection efforts have failed.

Nonprofit hospitals in Woe-town (USA Today)

An article in today's USA Today ("Scales tipping against tax-exempt hospitals") provides a laundry-list of legal challenges facing the nonprofit hospital industry. Here's the quick rundown:

•The IRS is looking at salaries paid to executives and officers of 2,000 of the nation's charities and non-profit foundations, which include hospitals. Salaries deemed “excessive” may violate federal law.

•Three congressional committees are investigating non-profit hospitals, looking at how they charge the uninsured, the tactics they use to collect unpaid bills and the amount of charity care they provide. New rules could result. Possibilities include more uniform financial reporting standards and regulations on the size and make-up of hospital boards.

•States and local property tax authorities are renewing their interest in hospital tax exemptions. In Illinois, the Department of Revenue denied the property tax exemption of one hospital, and the status of a second hospital is under review. Similar efforts in the 1990s led some states to require hospitals to report annually on their charitable activities.

•More than 40 class-action lawsuits have been filed since June by a team of high-profile law firms against nearly 400 not-for-profit hospitals. The lawsuits take issue with the way the hospitals treat the bills of the uninsured, saying their tax-exempt status implies that they should be more lenient with the uninsured.

Billing and collections practices are behind a lot of this scrutiny: "'When you start throwing people in jail because they don't show up for a court hearing on their overdue bills, that attracts attention,' says John Colombo, professor of law at the University of Illinois at Urbana-Champaign. 'The question will be: "Why is it we're providing these huge tax subsidies to these organizations?"'"

Bush's health plan doesn't produce claimed results.

And Kerry's will almost undoubtedly cost more -- as much as $300 billion more -- that his campaign's estimate of $653 billion over 10 years. That's what the experts, including those at the nonpartisan Congressional Budget Office, are saying, according to an article in yesterday's Washington Post by Ceci Connelly, whose reporting on the political side of health issues continues to be the best around.

Speaking of the CBO, there's a good article about its new director, who is catching some flak from his former bosses at the White House for publishing studies that don't toe the party line, in today's N.Y. Times.

GPO's receive subpoenas from Dallas' U.S. Attorney.

This is going to be huge.

Novation, one of the largest group purchasing organizations (GPO's) in the country ($20 billion a year in sales), has been served with subpoenas signed by the chief of the criminal division of the U.S. Attorney's office in Dallas, according to an article in Saturday's N.Y. Times. It's part of a much larger investigation into the way medical supplies are purchased, sold to hospitals, and billed to federal health programs like Medicare. Novation is owned by, and sells to, some of the largest and most prestigious nonprofit health care centers in the country, who in turn bill Medicare. Ultimately, the investigation will be looking into the hospitals' billing practices.

Medicare reform hits insurers' opposition.

The biggest reform package to amend Medicare since its inception in 1965 (passed last fall) is famously unpopular with seniors (at least the ones who know the details). It also really hacked off Congressional Democrats and Republicans alike, who have objected to being lied to about the true price of the reforms by the White House (through the DHHS/CMS chief actuary, acting under "orders" (literally a threat) from his boss, CMS chief Tom Scully). Now comes the story in the August 22 N.Y. Times that insurers don't much like it either, because it would require them to insure regionally, rather than locally or on a statewide basis, which most if not all insurers claim is not financially feasible. The insurers, of course, like to insure relatively low-cost insureds, and those are found in greater numbers in the cities. Rural patients cost insurance companies more, and the insurers shun them like the . . . well, you know. Of course, the insurers could raise premiums to cover their increased costs, but that would make them less competitive against other insurance companies who aren't in the Medicare market.

This is one more small example of a nearly universal pattern in American health care. Cream-skimming the insurance market, shifting costs to someone else, jimmying your product or your market so that you avoid high costs and thereby help to ensure hefty operating margins -- all of these techniques, which the federal government applies just as skillfully as the private insurance companies, are designed to get "someone else" to pay for the most expensive health care. The result is patchwork affair that will someday have more holes than fabric. The truth is, there is no free ride in health care. Everything gets paid for by someone, whether it's taxpayers, shareholders, other patients' health plans (and therefore other patients and their employers), consumers whose costs are inflated by the cost of health care, citizens who travel further (and at greater risk) for trauma care because of ER closings, the hospital employees who work longer hours for less pay . . . the costs are covered many different ways, some hidden and some more visible. Many of the ways these costs are covered are bad for everyone's health and drive costs up higher than they otherwise would be.

This is nuts. Who is going to bite the political bullet and propose a realistic plan for covering the actual costs of providing health care to all? Neither Kerry nor Bush has really come up with anything close, though Kerry's health plan would do much more for the uninsured than Bush's (and at a much higher cost). Ironically, the Medicare reform law's requirement of regional insurance plans was probably a step in the right direction, but that isn't the way the insurers, who prefer business as usual, want to compete.

First-ever HIPAA conviction.

I'm not sure we needed HIPAA in order to prosecute the conduct described in this press release, but that's the statute that was used by the US Attorney in Seattle to convict Richard Gibson, who admitted that he "obtained a cancer patient's name, date of birth and social security number while [he] was employed at the Seattle Cancer Care Alliance, and that he disclosed that information to get four credit cards in the patient's name. G[ibson] also admitted that he used several of those cards to rack up more than $9,000 in debt in the patient's name. [He] admitted he used the cards to purchase various items, including video games, home improvement supplies, apparel, jewelry, porcelain figurines, groceries and gasoline for his personal use."