Saturday, December 23, 2006

The Willie Sutton School of Healthcare Cost Management

Considering the incredible profits being earned by many of the middlemen in the health care industry, wouldn't you think there would be a more efficient way to deliver health care that didn't require the services of the paper-pushers, leaving more money on the table for goods and services that actually benefit real patients? That was one of the lessons, I thought, from the story involving United Healthcare and its CEO, Dr. Bill McGuire, whose compensation was in the billions (when you include ill-gotten gains on back-dated stock options). (Saul Friedman at Newsday.com, for one, sees it my way.)

The case for a system that doesn't depend on middlemen -- or that at least doesn't create billions in profits for the paper-pushers in the system -- is even more compelling when the middleman is working overtime on schemes to keep our costs and its profits high, despite actions by payors that are designed to cut costs without cutting quality or access to care. For example, in today's Wall Street Journal, there's a report [link good for a week] on Omnicare, a large operator of pharmacies and provider of pharmacy-related services for seniors. Seems they were switching patients to Zantac capsules just as Medicaid was slashing its reimbursement for Zantac tablets:
Last month, Omnicare reached a $49.5 million settlement with 42 states and the federal government over allegations about dosage switches for generic Zantac and two other drugs. Omnicare agreed in October to pay $52.5 million to the state of Michigan over separate accusations of Medicaid overbilling. Omnicare didn't admit wrongdoing as part of the settlements.

Friday, December 22, 2006

Some folks have a head for business . . . .

The AP reports (courtesy of MyWay) on an interesting case that lies at the intersection of criminal procedure and a patient's right to refuse an unwanted medical procedure. Seventeen-year-old Joshua Bush has a 9mm bullet in his head. Its presence isn't life-threatening, and a procedure to remove it wouldn't be any more dangerous than other surgeries that require general anesthesia. He has refused requests to have it removed, and is resisting a subpoena to obtain the bullet, presumably because it may link him to a robbery of a used car lot in which shots were exchanged. So who will win? The state, which has an interest in seeing an alleged shooter brought to justice? Or a person of interest to law-enforcement who would rather not have doctors poking around his head? Art Caplan says he thinks Bush will win. More on this later . . . . (Thanks to Maguire Center Coordinator Terri Gwinn for the tip.)

Piergiorgio Welby dies after respirator removed

The Italian poet who lost in his bid for court authorization to have his respirator removed (see earlier post), died after his physician removed the respirator without official permission (Reuters). Meanwhile, AP reports that prosecutors in Rome are looking into the details of Welby's death (AP/CBS News).

The death came the evening after an expert medical panel ruled Wednesday "that the use of a mechanical respirator 'does not constitute, as of now, extraordinary means.' But the panel also decided that precise guidelines for doctors were needed urgently to spell out what the law allows and what it does not" (International Herald Tribune). The Roman Catholic Curch in Italy has apparently already reached its own conclusions about Welby's death and earlier today denied his family's request for a church funeral (Reuters).

Wednesday, December 20, 2006

Italian poet pushes the law on his right to die

Today's New York Times has a story about Piergiorgio Welby, an Italian poet who apparently has entered the final chapter in his 40-year fight with muscular dystrophy. His breathing is supported by a respirator and he may have a feeding tube (the article isn't crystal clear on this point), and he has asked for permission to have his respirator removed. Italian authorities have so far said no:


“I love life, Mr. President,” Mr. Welby, 60, who has battled muscular dystrophy for 40 years, wrote to Italy’s president, Giorgio Napolitano, in September. “Life is the woman who loves you, the wind through your hair, the sun on your face, an evening stroll with a friend.

“Life is also a woman who leaves you, a rainy day, a friend who deceives you. I am neither melancholic nor manic-depressive. I find the idea of dying horrible. But what is left to me is no longer a life.”

Now Mr. Welby’s long drama appears to be nearing its final act. Last weekend, an Italian court denied legal permission for a doctor to sedate him and remove him from his respirator. Fully lucid but losing his capacity to speak and eat, he is deciding whether to appeal or to perform an act of civil disobedience that will kill him.

The article says that Italian law allows patients to refuse unwanted medical treatments but is unclear as to the right of a physician to participate. That's confusing enough, but what the article says about the Catholic Church's position in this case is more so:
The church, too, has conflicting teachings about what to do in this case, and what the Vatican thinks has a deep impact not only on the nation’s political class but also on doctors tied to the scores of Catholic-run hospitals around Italy.

The defense of life is central to the social doctrine of the church, and so it opposes abortion and capital punishment. Only last week Pope Benedict XVI reaffirmed his opposition to euthanasia, saying governments should find ways to let the terminally ill “face death with dignity.”

The church also opposes medical treatments to artificially prolong life, but several church officials have worried recently that ending artificial life support could result in de facto euthanasia.

“The problem is to know if we find ourselves truly in front of a case of an artificial prolonging of life,” Cardinal Javier Lozano Barragán, the Vatican’s top official for health, said in a recent interview with La Repubblica.
I had thought that the Catholic Church had long ago accepted that patients could refuse "extraordinary" treatments, even life-sustaining ones, and that one of the defining notions behind "extraordinary" is that the treatment merely prolongs the dying process. Granted, "prolongation" may be in the eye of the beholder, but Welby's death appears to be reasonably imminent with or without life-supporting measures and so it should be a relatively easy one for Church leaders. Or am I missing something?

Links for more information about this case:

Tuesday, November 14, 2006

Federal pre-emption of state-law claims medical-device manufacturers

This issue keeps turning up on SCOTUS' docket every few years like the proverbial bad penny. Most recently, it takes the form of Riegel v. Medtronic, No. 06-179. The petition for certiorari to the Second Circuit is pending, and after it was considered by the Court at its Nov. 3 conference, the justices invited the Solicitor General's office (on Nov. 6) to file a brief addressing the cert-worthiness of the case (known in the parlance of the trade -- the Supreme Court advocacy trade, that is -- as a CVSG (a "call for the views of the Solicitor General"). When the SG's brief is filed, it will be posted here. Thanks to Aaron Streett's excellent (and wickedly irreverent) Supreme Court e-mail newsletter for this bit of intelligence (subscription requests to "SCt Today" may be sent here).

The opening paragraphs of the Second Circuit's 2-1 opinion tell the tale nicely:

This case calls upon us to determine, inter alia, the scope of the preemption provision set forth in Section 360k(a) of the 1976 Medical Device Amendments to the Food, Drug, and Cosmetic Act, 21 U.S.C. §§ 301 et. [sic] seq. [link]Specifically, we must decide whether Section 360k(a) preempts common law tort claims regarding medical devices that have entered the market pursuant to the Food and Drug Administration’s (“FDA”) rigorous premarket approval (“PMA”) process. The Supreme Court left open this question in Medtronic v. Lohr, 518 U.S. 470 (1996) [link], which held that tort claims as to medical devices that have entered the market pursuant to the far less intensive premarket notification process (often referred to as the “Section 510(k) process”) are not preempted by Section 360(k)(a) [sic]. Since Lohr, the majority of circuits addressing this question have held that claims regarding PMA-approved medical devices are, by contrast, preempted. See Horn v. Thoratec Corp., 376 F.3d 163 (3d Cir. 2004); Martin v. Medtronic, Inc., 254 F.3d 573 (5th Cir. 2001); Brooks v. Howmedica, Inc., 273 F.3d 785 (8th Cir. 2001); Kemp v. Medtronic, Inc., 231 F.3d 216 (6th Cir. 2000); Mitchell v. Collagen Corp., 126 F.3d 902 (7th Cir. 1997); but see Goodlin v. Medtronic, Inc., 167 F.3d 1367 (11th Cir. 1999).

We now join this growing consensus and hold that tort claims that allege liability as to a PMA-approved medical device, notwithstanding that device’s adherence to the standards upon which it obtained premarket approval from the FDA, are preempted by Section 360(k)(a)[sic]. . . .

So there is a slight split in the circuits, more of a fissure, really, and the Court has asked the SG's office to offer some guidance on the need for the Court to clear up the confusion (whichever side might be said to be confused). Stay tuned . . . .

It's been a long time . . .

. . . not just a long time, actually: It's been a of a long time since my last post, due mostly to conferences and speeches the past few weeks at the Maguire Center for Ethics, combined with some speechifying of my own, on top of teaching, cranking out a new poetry column for the Dallas Morning News (scheduled for this Sunday's paper), and a few other official chores PLUS(arthroscopic surgery on a torn medial meniscus) . . . .okay, okay -- too much information. Well, I'm back, at least until we leave for Paris to visit #3 son (with #2 son in tow) next week, which means this page will be down for about 5 days startingNov. 23. For now -- For a day or two, I'll be playing a little catch-up ball to get through the backlog of interesting or useful (and in some case, useful and interesting) stuff. Stay tuned . . . .

Tuesday, October 24, 2006

Bones and tissue stolen by undertakers and sold illegally

This CNN story is just the latest in a long line of exposés of the apparently irremediably corrupt bones-and-tissue market. How long can this business go without significant regulation? USA Today had a good report on the situation in June 2006. The illustration to the right, by the way, shows an X-ray of a corpse whose leg bones were surreptitiously removed and replaced with household PVC pipe, as reported in the CNN story.

Monday, October 23, 2006

Porter & Teisberg's "Redefining Health Care" gets raked over the coals

I was impressed by Michael Porter's and Elizabeth Olmstead Teisberg's article-length adaption of their health-care policy book when the article appeared in the June 2004 issue of the Harvard Business Review. Now the book is out, and judging from the lukewarm (at best) response over on the Health Affairs blog, it is either not up to the standards one might expect from one of Harvard's 21 University Professors or exactly what you'd expect from a really bright guy who's long on theory and short on real-world health-care experience.

The blog entries are all listed here and include commentary from Gail Wilensky, Alan Maynard, Alan Enthoven, Uwe Reinhardt, and a slightly more upbeat James C. Robinson. Health Affairs' review of the Porter & Teisberg tome (wirtten by Tom Miller) is here.

Sunday, October 22, 2006

Widener seeking new director of health law program

Widener School of Law is looking for a director for their health law program. Here are the specs:

Widener University School of Law (Wilmington, DE campus) is seeking an experienced teacher and scholar to direct our nationally prominent Health Law Institute. Administrative experience is also desirable, but not necessarily required. The Director will be responsible for working with other health law faculty and administrative staff to develop new initiatives that can move the Institute forward. Among the expected responsibilities will be:

* planning conferences and symposia;
* creating new externship opportunities and expanding existing relations;
* working with the development office to identify and pursue granting and other giving opportunities;
* continuing to produce a high level of important scholarship;
* demonstrating leadership skills that will inspire other faculty members to engage fully in the Institute’s mission;
* teaching primarily health law courses (with a reduced teaching load).

Although candidates with backgrounds in any area of health law will be considered, we are especially interested in candidates who specialize in the financial and transactional aspects of health law and health care. A secondary area of interest is public health law. We are committed to increasing and improving the diversity of our faculty. Accordingly, we strongly urge members of historically excluded or disadvantaged groups to apply. Please direct replies to Professor John Culhane at: johnculhane@earthlink.net.

Saturday, October 21, 2006

Latest from AHLA's Health Lawyers Weekly (20 Oct 2006)

From the excellent Health Lawyers Weekly (AHLA member benefit), here's the table of contents from the October 20 issue:

Top Stories

Articles & Analyses

Current Topics

Copyright 2006 American Health Lawyers Association. Printed with permission.

Wednesday, October 18, 2006

If it could happen to Triad, it could happen to you

It's a sign of the times, I suppose: As health insurance becomes more expensive, more employers (especially small businesses and others that operate at the margins of profitability) drop health insurance, throwing more employees into the category of "self-pay" (unless they can afford coverage in the extravagantly priced individual-policy market), thus increasing the percentage of self-pay patients showing up at hospitals' doors, thus increasing the percentage of bad debt those hospitals carry (as a percentage of patient revenue). That is Triad Hospitals' explanation for third-quarter earnings that are 18 or 19 cents below analysts' expectations. The story is from Modern Healthcare's "Daily Digest" (requires paid subscription). Triad's press release is here.

Tuesday, October 17, 2006

Latest from AHLA's Health Lawyers Weekly (13 Oct 2006)

From the excellent Health Lawyers Weekly (AHLA member benefit), here's the table of contents from the October 13 issue:

Top Stories

  • CMS Reduces Improper Claims By $1.3 Billion
    Improper Medicare claims payments were reduced $1.3 billion between 2005 and 2006, the Centers for Medicare and Medicaid Services (CMS) said October 12.The Medicare fee-for-service (FFS) error rate has declined from 14.2% in 1996 when the improper payment rate was first reported, to 5.2% in 2005, to the current 4.4% in 2006, CMS said in a press release. Full Story
  • OIG Finds DME Manufacturer's Proposal To Offer Suppliers Free Advertising Problematic
    A proposed arrangement in which a durable medical equipment (DME) manufacturer would provide free advertising and reimbursement consulting services to some of its DME supplier customers could generate prohibited remuneration under the Anti-Kickback Statute and potentially trigger administrative sanctions, according an advisory opinion posted October 10 by the Department of Health and Human Services Office of Inspector General (OIG). Full Story

Articles & Analyses

Current Topics

Monday, October 16, 2006

"The Massachusetts Plan and the Future of Universal Coverage"

That's the title of an upcoming conference (click here) and law review symposium issue (click here) at the University of Kansas School of Law. (Do I see the fine hand of old pal Gail Agrawal in this topic and the great lineup of speakers?) Thanks to Professor Elizabeth Weeks for the heads up on this one.

AHLA, Matyas & Valiant score with new edition of fraud and abuse classic

I wouldn't want to guess how many thousands of health lawyers have turned to one of the first two editions of Legal Issues in Healthcare Fraud and Abuse by David Matyas (who joined in on the 2nd edition) and Carrie Valiant, both of the Washington, D.C., office of Epstein, Becker & Green. Since its publication by AHLA in 1994, LIHFA has served as a primer on fraud and abuse issues for the newly minted healthcare lawyer and a quick desk reference for anyone looking for a leg up in his or her research on a specific issue.

The third edition has just been published, and I'm happy to report that it is a worthy successor to the first two editions. For a book that comes in at just under 500 pages, it is surprisingly comprehensive. It also doesn't scrimp on historical background and policy analysis and includes a useful chapter on the ethical and legal aspects of representing healthcare organizations in fraud and abuse matters.

Strong "buy" recommendation.

Sunday, October 15, 2006

Back to the world of the living

I've been away for a little work on my damaged left knee. Sorry for the break in communications. I'll try to make up for lost time tonight and tomorrow. . . .

Wednesday, October 11, 2006

Falling into Medicare Part D's doughnut hole

Good editorial in the Oct. 6 N.Y. Times about the Part D Medicare pharmaceutical benefit. It omits one fact and misleadingly states another.

1. For some beneficiaries, the effect of the doughnut hole -- which leaves seniors paying 100% of their drug costs between $2250 and $5100 -- will be higher out-of-pocket costs after Part D became effective than before. For some, perhaps many or even most, Medicare beneficiaries -- including those whose drug use doesn't push them into the doughnut hole, as well as those whose utilization is at truly catastrophic levels, where Plan D kicks back in and covers 95% of drug costs -- Part D will be a boon. But it's promise is false for many who fall into the doughnut hole and aren't "lucky" enough to have catastrophic levels of drug needs.

2. The Times says Medigap coverage can be purchased to insure the doughnut hole. That's only true, I believe, if the beneficiary's drug plan offers supplemental coverage, and many don't. In many other cases, seniors who were unaware of the implications of the doughnut hole chose a drug plan that didn't offer supplemental coverage and was therefore cheaper than another plan that did offer the supplemental coverage at a somewhat higher price. This is confusing for young, healthy law students in my health law class; imagine what confusion was out in the land when seniors were sorting and evaluating their options earlier this year.

Saturday, October 07, 2006

Rationing flu vaccine: WSJ considers the ethics

Good discussion in a FREE online article over at the Wall Street Journal: "If We Must RationVaccines for a Flu,Who Calls the Shots?," by Sharon Begley. Here's the teaser:

You have 100 doses of a vaccine against a deadly strain of influenza that is sweeping the country, with no prospect of obtaining more. Standing in line are 100 schoolchildren and 100 elderly people.

The elderly are more likely to die if they catch the flu. But they also have fewer years left to live and don't get out enough to easily spread or catch the disease. The kids are more likely to act like little Typhoid Marys, sneezing virus over anyone they encounter, and have almost their whole life ahead of them. But they're also less likely to die if they get sick.

Whom do you vaccinate?

This dilemma is haunting experts concerned that avian influenza might start spreading from person to person instead of (as far as we know) mainly from birds to people. But it also applies to regular old flu, which always has the potential to reach pandemic proportions. In response, studies now are shedding light on the ethical issues and the most effective strategy for reducing illness and death if vaccine must be rationed. Sadly, they make a pretty good case that current U.S. policies leave a lot to be desired.

Friday, October 06, 2006

Latest from AHLA's Health Lawyers Weekly (06 Oct 2006)

From the excellent Health Lawyers Weekly (AHLA member benefit), here's the table of contents from the October 6 issue:

Top Stories

Articles & Analyses

Current Topics

(c) 2006 AHLA. Reprinted with permission

Wednesday, October 04, 2006

GAO: CMS' medical data susceptible to hackers


Here are a few opening paragraphs that ought to startle even the most jaded government bureaucrat:

Security weaknesses have left millions of elderly, disabled and poor Americans vulnerable to unauthorized disclosure of their medical and personal records, federal investigators said Tuesday.

The Government Accountability Office said it discovered 47 weaknesses in the computer system used by the Centers for Medicare and Medicaid Services to send and receive bills and to communicate with health care providers.

The agency oversees health care programs that benefit one in every four Americans. Its massive amount of data is transmitted through a computer network that is privately owned and operated.

However, CMS did not always ensure that its contractor followed the agency's security policies and standards, according to the GAO report released Tuesday.

"As a result, sensitive, personally identifiable medical data traversing this network are vulnerable to unauthorized disclosure," the federal investigators said. "And these weaknesses could lead to disruptions in CMS operations."

There is more here: AP/MyWay. The GAO report is here (pdf).

Oh, and back to the government bureaucrat who should be at least a little alarmed that there are 47 access points for hackers to gain access to the medical records of 1 out of 4 Americans. CMS administrator Mark McClellan -- who, with a Ph.D. in economics and an M.D., presumably knows when he is commenting on the story he wished he had read rather than the story that he was actually reading -- commented that the GAO "found no evidence that confidential or sensitive information had actually been compromised."

SSRN roundup: public health law (September 2006 additions)


Tuesday, October 03, 2006

NLRB rules most charge nurses are "supervisors"

In a potentially far-reaching opinion on September 29 (and released today), the NLRB (by a 3-2 vote) ruled that permanently assigned charge nurses are supervisors -- and therefore are a part of managment -- and ineligible for union membership. Here's the "Daily Digest" version of the story from Modern Healthcare:

The National Labor Relations Board ruled that certain full-time hospital charge nurses are supervisors and therefore ineligible to join unions in a case involving Oakwood Healthcare, Dearborn, Mich., and the United Auto Workers. The long-awaited decision creates a "broad new standard" for union membership, labor leaders said. The "immediate implications" of the case are "devastating to workers in the healthcare industry and potentially in other industries where professional employees direct or assign the work of others," AFL-CIO [link] President John Sweeney said in a statement [link].

The case is Oakwood Healthcare, Inc., No. 7–RC–22141 (pdf). It reverses a 2002 decision by the Acting Regional Director to include charge nurses in the bargaining unit, principally on the basis of the Supreme Court's decision in NLRB v. Kentucky River Community Care, 532 U.S. 706 (2001). In Kentucky River, another nurse-supervisor case, the Court rejected the Board's categorical exclusion from supervisor status of employees who exercise “ordinary professional or technical judgment in directing less-skilled employees to deliver services in accordance with employer-specified standards.” (This was the second time in a decade that the Court had spanked the NLRB for its analysis in a nurse-supervisor case. See NLRB v. Healthcare & Retirement Corp. of America, 511 U.S. 571, 579 (1994) (holding 5-4 that the Board erred in finding a nurse’s supervisory activity that was incidental to patient care was not exercised “in the interest of the employer”).)

Left to figure out what its standard should be after Kentucky River, the Board states: "exercising our discretion to interpret ambiguous language in the Act, and consistent with the Supreme Court’s instructions in Kentucky River, we herein adopt definitions for the terms 'assign,' 'responsibly to direct,' and 'independent judgment' as those terms are used in Section 2(11) of the Act. In a key paragraph, the Board writes:

Consistent with the Court’s Kentucky River decision, we adopt an interpretation of the term “independent judgment” that applies irrespective of the Section 2(11) supervisory function implicated, and without regard to whether the judgment is exercised using professional or technical expertise. In short, professional or technical judgments involving the use of independent judgment are supervisory if they involve one of the 12 supervisory functions of Section 2(11). Thus, for example, a registered nurse who makes the “professional judgment” that a catheter needs to be changed may be performing a supervisory function when he/she responsibly directs a nursing assistant in the performance of that work. Whether the registered nurse is a 2(11) supervisor will depend on whether his or her responsible direction is performed with the degree of discretion required to reflect independent judgment.
Webster's Third place a large role in the Board's analysis, which leads the Board to complain, somewhat defensively, "In interpreting those statutory terms, we do not, as the dissent maintains, blindly adopt 'dictionary-driven' definitions. Rather, we begin our analysis with a first principle of statutory interpretation that 'in all cases involving statutory construction, our starting point must be the language employed in Congress. . . . '"

Much is at stake in these cases involving professionals in the workplace, cases in which the Board is struggling to extend the scope of the NLRA -- a remedial statute -- but not beyond the limits of Congressional intent. As the dissenters point out:
Today’s decision threatens to create a new class of workers under Federal labor law: workers who have neither the genuine prerogatives of management, nor the statutory rights of ordinary employees. Into that category may fall most professionals (among many other workers), who by 2012 could number almost 34 million, accounting for 23.3 percent of the work force. “[M]ost professionals have some supervisory responsibilities in the sense of directing another’s work—the lawyer his secretary, the teacher his teacher’s aide, the doctor his nurses, the registered nurse her nurse’s aide, and so on" [quoting from NLRB v. Res-Care, Inc., 705 F.2d 1461, 1465 (7th Cir. 1983) (opinion by Circuit Judge Posner)].

In the view of the dissenting Board members, the Board has failed yet again:
If the National Labor Relations Act required this result — if Congress intended to define supervisors in a way that swept in large numbers of professionals and other workers without true managerial prerogatives—then the Board would be dutybound to apply the statute that way. But that is not the case. The language of the Act, its structure, and its legislative history all point to significantly narrower interpretations of the ambiguous statutory terms “assign . . . other employees” and “responsibly to direct them” than the majority adopts. The majority rejects what it calls a “results-oriented approach” in interpreting the Act. But the reasonableness of the majority’s interpretation can surely be tested by its real-world consequences. Congress cared about the precise scope of the Act’s definition of “supervisor,” and so should the Board. Instead, the majority’s decision reflects an unfortunate failure to engage in the sort of reasoned decision-making that Congress expected from the Board, which has the “primary responsibility for developing and applying national labor policy.” NLRB v. Curtin Matheson Scientific, Inc., 494 U.S. 775, 786 (1990).

SSRN roundup: health law (September 2006 additions)


Monday, October 02, 2006

More on the Provena tax-exemption case

As previously noted here, Provena Covenant Medical Center last week lost its administrative appeal to the Illinois Department of Revenue of Champaign County's decision to revoke Covenant's tax-exempt status. The Department's September 29 ruling is available here (pdf).

For an extremely helpful analysis of all the issues -- prepared by Linda Sauser Moroney, a partner in the Milwaukee office of Gardner Carton & Douglas, and her colleagues T.J. Sullivan and Karen McAfee (partner and counsel to the firm, respectively, in its Washington office) -- go here (pdf).

Sunday, October 01, 2006

GAO report on emergency medical services post-Katrina

Hurricane Katrina: Status of Hospital Inpatient and EmergencyDepartments in the Greater New Orleans Area. GAO-06-1003, September29. Report; highlights.

Summary findings:
While New Orleans continues to face a range of health care challenges, hospital officials in the greater New Orleans area reported in April 2006 that a sufficient number of staffed inpatient beds existed for all services except for psychiatric care -- some psychiatric patients had to be transferred out of the area because of a lack of beds. Overall, as of April 2006, the greater New Orleans area had about 3.2 staffed beds per 1,000 population, compared with the national average of 2.8 staffed beds per 1,000 population reported by the American Hospital Association. Hospital officials told us that they planned to open an additional 674 staffed beds by the end of 2006 -- 390 of which would be at University Hospital -- although they also reported that recruiting, hiring, and retaining nurses and support staff was a great challenge. With the addition of these beds, the population would have to increase from 588,000 in April 2006 to 913,000 by December 2006 before staffed beds would drop to the national average. For all types of care, eight of the nine hospitals we contacted provided us with an estimated overall occupancy rate for the 9-month period following the hurricane (through April 2006) and for the 12-month period before the hurricane. The hospitals’ occupancy rates for the 9-month period after the hurricane ranged from 45 percent to 100 percent, or an average of 77 percent, compared with a range from 33 percent to 85 percent, or an average of 70 percent, for the 12-month period before the hurricane. The American Hospital Association reported that the average monthly hospital occupancy rate nationwide was 67 percent in 2004. Eight of the nine hospitals that remained open after Hurricane Katrina also reported a high demand for services in their emergency departments, similar to the nationwide trend reported by the Institute of Medicine in June 2006 that emergency department crowding is a nationwide problem.

Cancer treatment @ $4200 a pop: is it worth it?

Today's NY Times had an article in the Business section on Abraxane -- in the words of the author, "a new version of an old cancer drug has helped make Dr. Patrick Soon-Shiong a billionaire":

The drug, Abraxane, does not help patients live longer than the older treatment, though it does shrink tumors in more patients, according to clinical trials. And the old and new medicines have similar side effects. An independent review of Abraxane published in December in a cancer research journal concluded that the drug was “old wine in a new bottle.”

Still, Dr. Soon-Shiong’s company, Abraxis BioScience, has promoted Abraxane as a major advance in treating late-stage breast cancer — that is, for patients who have not responded to other treatments and are now close to death —and is seeking approval for patients to use it earlier in their treatment. And, in at least one way, Abraxane is a breakthrough: it costs about 25 times as much as a generic version of the older medicine, which is best known by its brand name, Taxol.

Because of the odd economics of the cancer drug market, though, Abraxane’s price does not seem to be hurting its popularity.

About 20,000 people have now been treated with the drug, and Dr. Soon-Shiong expects its sales to approach $200 million this year. By 2010, Abraxane’s annual sales could reach $1 billion, analysts say.

Those rosy forecasts illustrate the pricing power that makers of cancer drugs wield. With patients often facing grim prognoses and desperate for new therapies, and insurers relatively powerless to negotiate prices or deny coverage, the cost of treatments seems to have little impact on demand.

The rise in cancer-drug prices is a microcosm of broader trends pushing up health care costs nationally. Despite decades of efforts by governments and insurers to restrain costs, patients continue to want the newest — and most expensive — drugs and medical devices. And doctors and the health care industry have little reason to keep costs in check, because insurers rarely deny coverage for new treatments on the basis of price.

As a result, health care costs continue to skyrocket. On Tuesday, the Kaiser Family Foundation reported that the cost of employee health insurance coverage rose 8 percent, according to a survey conducted from January to May this year. Businesses now spend about $8,500 a year for health insurance for the average family, the foundation said, with employees adding $3,000, not counting the cost of deductibles and other out-of-pocket payments.]

Abraxane, and cancer drugs generally, are still a tiny part of total medical spending. But their costs are rising even faster than overall health care inflation. Worldwide, spending on cancer drugs is expected to more than double from 2004 to 2009, to $55 billion, with most of that in the United States.

Largely as a result of investor enthusiasm for Abraxane, the stock market value of Abraxis is $4.6 billion. The company, which also makes several generic drugs used in hospitals, had a profit of $86 million last year on sales of $519 million. Dr. Soon-Shiong, the company’s chairman, owns 84 percent of the stock, worth about $3.8 billion.

What is wrong with this picture?