Hospitals Say They’re Penalized by Medicare for Improving Care.

Reed Abelson has an excellent piece in this morning's N.Y. Times about the Medicare prospective payment system (PPS) for reimbursing hospitals for in-patient care. The upshot is that hospitals that creatively and effectively produce the best health outcomes for their patients are often systematically punished by a reimbursement system that pays on the basis of admissions and discharges, rather than outcomes. The lead example in the article is Utah's Intermountain Health Care network, which

says it saves at least 70 lives a year. By giving the right drugs at discharge time to more people with congestive heart failure, Intermountain saves another 300 lives annually and prevents almost 600 additional hospital stays.

But under Medicare, none of these good deeds go unpunished.

Intermountain says its initiatives have cost it millions of dollars in lost hospital admissions and lower Medicare reimbursements. In the mid-90's, for example, it made an average profit of 9 percent treating pneumonia patients; now, delivering better care, it loses an average of several hundred dollars on each case.

"The health care system is perverse," said a frustrated Dr. Brent C. James, who leads Intermountain's efforts to improve quality. "The payments are perverse. It pays us to harm patients, and it punishes us when we don't."

And it's not just the providers who think the system is perverse:

"Right now, Medicare's payment system is at best neutral and, in some cases, negative, in terms of quality — we think that is an untenable situation," said Glenn M. Hackbarth, the chairman of the Medicare Payment Advisory Commission, an independent panel of economists, health care executives and doctors that advises Congress on such issues as access to care, quality and what to pay health care providers.

In a letter published in the current edition of Health Affairs, a scholarly journal, more than a dozen health care experts, including several former top Medicare officials, urged the program to take the lead in overhauling payment systems so that they reward good care.

Even the departing head of the Medicare program agrees with this assessment: "'It's one of the fundamental problems Medicare faces,' said Thomas A. Scully, who as the administrator of the Centers for Medicare and Medicaid Services has encouraged better care by such steps as publicizing data about the quality of nursing home and home-health care and by experimenting with programs to reward hospitals for their efforts."

Children's Hospital Bans Smoking by Staff.

I am no fan of the tobacco industry, but I wonder about today's news story that all employees of a children's hospital in Columbus, Ohio, will be barred from smoking anywhere on the "sprawling hospital grounds" effective May 2004. Is this about the health of employees? The health of patients and families? A public health statement? A form of public education? Aesthetics? (The CEO is quoted as saying patients should not have to contend with the lingering scent of cigarette smoke on staff members returning from breaks.) Ironically, no one quoted in the article, including the spokesperson for a second-hand smoke organization, claimed that this ban was to improve the healthiness or cleanliness of the hospital environment. As long as this is happening in a private hospital, there would appear to be no constitutional issue involved, so the hospital is well within its rights. But does that make the policy right?

Even the conservative Cato Institute hates this Medicare reform law.

Read their critique (largely based on the fiscal irresponsibility of the thing) here.

Clinton-era policy makers analyze Medicare reform law.

As reported by Reuters this afternoon (click here), liberal health care policy experts are blasting the new Medicare reform package.

Medicare chief to resign.

In the past hour everyone's reporting that Tom Scully has submitted his resignation as CMS chief effective Dec. 16th. Here is the CBS Marketwatch story. As reported in today's Washington Post ("Medicare Chief Scully Says He's 'Checking Out of Dodge'") Scully was extensively involved in the Conference Committee negotiations over the Medicare reform legislation passed last week (which the White House says the President will sign next Monday). Indeed, as possessor of the most detailed and encyclopedic knowledge of the massive new law, he is now in a position to provide highly remunerated value to law firms and investment bankers keen to make a buck in health care over the next few years. As reported not only in the Post article, but in more detail in today's New York Times (Google link; should be stable, but if not try this), the bidding war over Scully's services has been going on for about 6 months. His participation in the Medicare reform negotiations was based upon a waiver he received from CMS's ethics office. In light of Scully's pre-CMS salary as president of the Federation of American Hospitals ($675,000), one might well expect to see his compensation top 7 figures, especially if he works out a combination arrangement with a law firm and an investment banking firm. As the papers are quick to concede, no one is alleging that Scully took any position during negotiations over the future of Medicare with an eye toward his future employment options, and Scully is an honorable man. Also, Scully might have been the perfect choice to spearhead the Administration's efforts to get a passable reform bill out of conference. The ethics clearance, however, was handy, n'est-ce pas?

Church May Penalize Politicians

Great article in Monday's L.A. Times about the rustlings within the Catholic Church to discipline Catholic politicians whose public positions contradict Church orthodoxy. The article is here (requires free registration). According to the article, "Punishments could range from bans on speaking appearances at Catholic institutions to excommunication." It's not just a theoretical possibility, either: "A few of America's 195 dioceses, including Dallas and Philadelphia, bar abortion-rights politicians from speaking at Catholic churches and schools. In April, news leaked that Bishop Robert Carlson of Sioux Falls, S.D., had sent a letter asking the state's Democratic Sen. Tom Daschle to stop calling himself a Catholic."

I have no quarrel with the Catholic Church advocating public policy, nor should the Church -- or any church or religious organization -- feel constrained about identifying politicians with whom it agrees and disagrees. And any faith community has the right to define the content of its core beliefs, as well as to identify those whom it regards as "in" and "out" of the faith's traditions and beliefs. But at least since JFK tried to put this issue to rest, I thought American politicians, and the polity to which they appeal, had a pretty clear idea that politicians don't (and shouldn't) take their lead from church leaders. More to the point: Can't a Catholic politician believe privately that abortion or the death penalty is wrong and yet profess publicly that the country's policies should be open to alternative moral views? That a pro-choice law represents an appropriate balance of competing private moralities, even if -- as a practicing Catholic -- that politician might fervently desire that the law was otherwise?

Texas Doctors’ Group Settles FTC Price-Fixing Charges

Another Texas physicians' group came up short in a price-fixing investigation by the FTC. This must be at least the third (possibly fourth) in the last 18 months or so. The FTC's press release gives some details and a link to the file documents.

Do religious groups have to follow laws they don't believe in?

Texas Health Blog provides a link to this AP story about litigation in NY and Calif. concerning whether the Catholic Church's employee health plan has to include contraceptives in employee health plans. The Catholic Church regards contraceptive use as immoral, but in 20 states failure to provide coverage for contraceptives is deemed (by statute) to discriminate against women. "The 20 states that require private-sector insurance coverage for prescription contraceptives include Arizona, California, Connecticut, Delaware, Iowa, Georgia, Hawaii, Maine, Maryland, Massachusetts, Missouri, Nevada, New Hampshire, New Mexico, New York, North Carolina, Rhode Island, Texas, Vermont and Washington." In both NY and Calif., as well as in other states, "churches are exempt from having to provide contraception coverage for employees who work inside parishes and houses of worship. That is known as the 'religious employer exemption' because the parishes generally serve worshippers and employ those with similar religious views. . . . Several states have no such exemptions for religious entities. Other versions exempt church groups and 'qualified church-controlled organizations.'"

20 Questions for Senior Judge Richard Arnold.

Howard Bashman's "20 Questions" session (on his blog, How Appealing) with Senior Judge Richard Arnold should be required reading for all law students, especially students with an interest in appellate practice or in securing a judicial clerkship after graduation. Or, for that matter, with an interest in a life lived greatly in the law.

Keillor on Twain.

He's been called the Mark Twain of our generation, a born story-teller whose tales from the heartland of America have been embraced by sophisticates on both coasts. So there's a special treat in today's "Writer's Almanac" in the form of Keillor's mini-biography of Twain, whose birthday it is today:

It's the birthday of Mark Twain, born Samuel Langhorne Clemens, in Florida, Missouri (1835). He wrote Life on the Mississippi (1883), The Adventures of Huckleberry Finn (1884), and his own favorite, The Personal Recollections of Joan of Arc (1891). He was cynical and irreverent, but he had a tender spot for cats. There were always kittens in the house, and he gave them names like "Sin" and "Sour Mash." "Mamma has morals," said his daughter Suzy, "and Papa has cats." Twain swore constantly and without shame. His streams of profanity alarmed his wife. One day he cut himself shaving, and she heard a string of oaths from the bathroom. She resolved to move him to repentance, and she repeated back to him all the bad words he had just said. He smiled at her and shook his head. "You have the words, Livy," he said, "but you'll never learn the tune."

After Twain published The Adventures of Huckleberry Finn, he had a great deal of cash on his hands, which he invested in a typesetting machine that was very complicated and demanded more and more investment. In the end, it didn't work. He had to declare bankruptcy, and he decided to go on a worldwide lecture tour, the proceeds of which he would use to pay back all of his creditors. His visits to Africa and Asia convinced him that a God who allowed Christians to believe that they were better than savages was a God he wanted no part of.

Mark Twain said, "It is better to keep your mouth shut and appear stupid than to open it and remove all doubt." And he said, "Good friends, good books and a sleepy conscience: this is the ideal life."

Thanksgiving poem, on the rocks, with a twist.

Today's Book Review section of the N.Y. Times includes a poem by Susan Kinsolving -- "Fill the Cavity with Crumbs" about Thanksgiving at her home the year she was divorcing her "almost-ex". The internal rhymes propel this domestic drama across the page, suggesting the kind of hidden logic by which most families (and family get-togethers) proceed. Very nice.

More reactions to the Medicare reform bill.

It's been touted -- by supporters and critics alike -- as the most sweeping set of changes to Medicare since its inception in 1965. It is therefore not surprising, I suppose, that the political reactions to House Bill 4 (at least at this early stage -- months if not years before the full implications of this thing will be known and understood) are confounding the pols and pundits. Two articles in today's N.Y. Times pretty well summarize the situation:

• "But although some economists on the left and right might wring their hands, younger workers don't seem to be complaining. According to polls, members of the post-boomer generation are actually more enthusiastic than their elders about this new legislation. Their feeling is partly due to a desire to see their parents and grandparents save money on drugs, which ultimately redounds to their own benefit. And a lot of these younger adults — like members of Congress who voted for the bill — probably haven't quite focused on who will pay for the program or how." (A $400 Billion Purchase, All on Credit, John Tierney)
• "[Retirees] express disappointment but little surprise because, they say, they never had high hopes. They say they feel they were sold out, by Republicans and AARP, which endorsed a Medicare bill drafted mainly by Republicans. But the Democrats, they say, did not fight hard enough for a better drug benefit." (Florida Elderly Feel Let Down by Drug Benefit, Robert Pear)

US Congress OKs nanotech bill.

According to a report in the on-line version of The Scientist, Congress has passed S. 189, the "21st Century Nanotechnology Research and Development Act." This is a terrific article, with links to a previous piece on the biomedical ethical implications of nanotechnology and various studies and reports on nanotechnology, as well as an easy-to-get overview of the field. For more information, visit the federal government's National Nanotechnology Initiative web site.

Organ retrieval practices tightened up in UK.

As reported in London's Financial Times, "The UK government is to tighten up the rules governing the removal of organs and tissues after death. . . . The legislation, announced in the Queens' speech on Wednesday, will make consent the fundamental principle governing organ removal and set up an an authority with over-arching power to regulate transplantation, anatomical examination, post mortem studies and the use of human tissue in education and research." The article explains that consent has been required since 1994, "but that has not prevented abuses":

As many as 20,000 brains were illegally removed and kept by doctors without the consent of parents in the 1970s 80s and 90s at Alder Hey children's hospital in Liverpool while thymus glands were given to a pharmaceutical company in exchange for cash.

The harrowing events at Alder Hey led to some parents having to conduct up to four funerals as organs from their children were returned at different times.

Ideology and science (II)

The current issue of the eminent journal Science has an editorial by Alan Leshner entitled, "Don't Let Ideology Trump Science" (I don't know for sure, but you may need to be a subscriber to view this article). Here's the gist of it:

The moralizers are trying to muck with U.S. science again. A flurry of activity over the past few weeks has followed the effort of a right-wing religious group to call into question almost 200 National Institutes of Health (NIH) grants focusing on behavioral and social aspects of issues such as sexuality, HIV/AIDS transmission, and drug abuse . . . This incident could have been written off as noise by a fringe group had it not come almost on the heels of the near-passage in the House of Representatives last July of what came to be known as the "Toomey Amendment," after its author Rep. Patrick Toomey (R-PA). By a vote of 212 to 210, the House just missed defunding four NIH research grants on sexual behavior that had already been through rigorous scientific peer review and approval by NIH Institute National Advisory Councils . . . .

We are not concerned that Congress wishes to exert oversight over the U.S. research agenda and research priorities. That is their job, and we want our representatives to do it well. We also believe that the scientific community should be fully accountable to the public, because much science is publicly funded and the public is the ultimate beneficiary of our work. By nature, science is an open enterprise that invites examination and criticism--and more often than not, it is actually strengthened by public scrutiny. Oversight bolsters public confidence in the scientific enterprise and provides incentives for scientists to interact with the public, explain the importance of their research, and spread an ethic of intellectual curiosity and critical thinking that helps make our society more innovative and dynamic.

On occasions like the present one, however, healthy scrutiny gives way to irresponsible attack. The recent assaults on science were not directed at broad research questions or national research priorities. Instead, they were aimed at imposing ideology and religious doctrine on the awarding of individual research grants, intervening in and thereby subverting the scientific peer review system that has served both science and national needs so well.

The moral judges who are doing this don't like the fact that HIV is spread through sexual contact, and they believe that drug addicts have made bad personal choices that have led to addiction. Is their disapproval of these behaviors a justification for stifling research on the diseases that result? Do they suppose that some form of national denial will make these problems go away? Regardless of personal feelings about the etiology of these illnesses, we need to understand their causes and transmission patterns if we are ever to get a handle on some of society's most pervasive public health problems.

WSJ.com - Remaking Medicare

Not sure whether this requires a subscription or not, but for a pretty good roundup of news and analysis of the Medicare reform law, this Wall Street Journal site is good.

Ideology and science (I)

An editorial in today's Palm Beach Post is a reaction to an article I missed from the Nov. 21 Wall Street Journal. Here's a snippet from the Journal article by Antonio Regaldo:

Advocates for infertile couples have raised alarms over draft documents released by President Bush's Council on Bioethics that recommend sweeping changes in the way assisted reproduction is regulated in the U.S.

The draft recommendations, quietly posted to the council's Web site last month, call on the federal government to track and monitor embryos created for fertility purposes. They call for far-reaching legislation that would curtail embryo research and some common business practices. One proposal called for banning the sale of human eggs and sperm, a common practice in the U.S., though transcripts of the council's October meeting indicate that proposal has been withdrawn.

"The recommendations and legislation could change the face of reproductive medicine in this country," said Pamela Madsen, executive director of the American Infertility Association, an advocacy group in New York.

A final report from the ethics panel, formed by President Bush in 2001 following the divisive stem-cell debate, won't be released until next year. Council staff said the drafts are discussion documents and subject to change.

But critics and even some members of the 17-person council said the drafts signaled an ongoing effort by conservative members of the council to create new protections for human embryos created in fertility laboratories.

Here is the Palm Beach paper's reaction in an editorial entitled, "Find a Cure for Ideology":

President Bush's Council on Bioethics is reviving attempts to ban therapeutic cloning for research -- and this time, patients suffering from debilitating diseases and scientists seeking cures for them wouldn't be the only potential victims. In its latest inappropriate invocation of ideology, the president is using his panel to urge Congress to assign legal rights to human embryos. Not only would such unnecessary legislation disrupt research toward cures for Parkinson's, diabetes and other widespread diseases, the action would make it harder for infertile couples to conceive.

Referring to the embryos as "children-to-be," the panel's draft recommendations -- reported in The Wall Street Journal -- call for the federal government to track the creation, use and disposition of embryos. The panel suggests a ban on using an 11-day-old or older embryo for research, restrictions on surrogate mothers and limits on the reason a woman could get pregnant by in vitro fertilization. Would enforcement require parents to declare that they plan to "produce a live-born child"? How does such a requirement fit the panel's claim that it wants to protect women "against certain exploitative and degrading practices"?

According to a study by the Rand Corp. and the Society of Assisted Reproductive Technology, nearly 90 percent of the 396,526 embryos in storage throughout the United States as of April 2002 were designated for future family-building by the patients who created them. Fewer than 3 percent -- 11,000 -- are available for donation for research. Those that are were designated, correctly, by the parents, not the government.

Two years ago, President Bush approved spending federal money on embryonic stem-cell research but set limits on the study. The cell lines he approved for federally financed research were initially grown on mouse cells -- which, a medical ethics panel formed by Johns Hopkins University said this month, could expose humans to an animal virus their immune systems could not fight. Safer stem-cell lines, the panel said, now exist but aren't eligible for federal financing. The president would rather allow ideological debates to halt progress.

Twenty-five years after the birth of the first "test-tube baby," Congress should not let the president and his advisers distract from the quest for life-saving discoveries.

The draft recommendations come in a staff working paper entitled "Biotechnology and Public Policy: Biotechnologies Touching the Beginnings of Human Life/Defending the Dignity of Human Procreation."

The Seattle Times: Big Pharm Big Winner in Medicare Sweepstakes.

The Seattle Times put their finger on a number of important issues in today's editorial on the new Medicare bill:

With the closely held GOP legislation approaching 1,000 pages, it will take time to fully understand all that was included and what the cost will be.

Amen, brother. Ever read a session law? It's an interesting exercise. This is what got delivered to House members and Senators just before the Thanksgiving recess: (1) text of the legislation (678 pp.), (2) the joint explanatory statement of the Conferees (403 pp.), (3) a summary of the Medicare conference agreement, (4) a summary of the regulatory and contracting reform conference agreement, (5) a table of Congressional Budget Office estimates for major provisions of H.R. 1 and S. 1 (the competing versions of the Medicare reform bill), and (6) the CBO's 68-page analysis of both bills as of June 27 (i.e., before the conference committee started whacking at the bills to forge their compromise). It will take days, if not weeks, to track these changes back through existing provisions to make sense of the whole thing, and just as long, if not longer, to get a solid estimate of costs and savings from the bipartisan CBO.

Still, this much is known, as Washington Sen. Patty Murray put it, "The Senate has passed a bill that fundamentally changes the Medicare program while adding a meager 'drug benefit.' "

A bipartisan desire for a prescription drug benefit for the 40 million people on Medicare morphed into a legislative catch-all that tied enough disparate interests together to pass sweeping changes.

An initial impulse is to say that the bloated Medicare bill is better than nothing. That is not clear at all.

What does seem pretty clear, however, is that, "in the final analysis, U.S. pharmaceutical companies will be better protected than elderly Americans in the overhaul of Medicare passed by Congress." Consider:

• "Private employers will receive $70 billion in tax-free subsidies to encourage continued drug coverage for retirees once the Medicare drug plan begins in 2006."
• "The new drug benefit will be administered by private companies and health plans with $12 billion in subsidies."
• "In the meantime, Medicare is specifically prohibited from using its buying power to negotiate discounts for bulk drug purchases or create any price structures for reimbursement."
• "Also, the government cannot have a preferred list of cost-effective drugs or specify a cheaper generic substitute for a costlier name brand. Medicare sets prices with doctors and hospitals but is prevented by law from doing the same thing with prescription medicine."
• "The final bill did not directly ban reimporting cheaper drugs from Canada, but requires Department of Health and Human Services approval, which has been refused."

So how did Big Pharm come out? "Drug companies have a direct stake in being for expanded coverage, and against formularies, price caps and Canadian imports."

And how did Medicare beneficiaries and rural providers -- the ostensible targets of this reform package -- make out?

• "The bill costs $400 billion over 10 years, and includes $25 billion in higher payments to rural hospitals and doctors. Other hospitals and doctors facing cuts under current law will receive higher payments or avoid future cuts."
• For two years, 2004 and 2005, Medicare beneficiaries can buy a discount card worth a savings of about 15 percent. Starting in 2006, the Medicare plan will collect a monthly $35 premium and charge a $250 deductible. Then insurance would pay 75 percent of drug costs up to $2,250. Then coverage stops until the retiree pays the next $2,850 out of pocket. Both the premium and gap in coverage are forecast to grow 78 percent in the first seven years of the plan. . . . Premiums and deductibles would be waived for seniors with incomes up to $12,123, and $6,000 in assets. Other seniors, especially with incomes over $80,000 a year, will find higher premiums."

The verdict?

Each piece could have been handled separately. A clean prescription bill was possible. So was more money for rural hospitals. But taken together, they provided political cover for a fundamental change in the 38-year-old government-run Medicare plan.

Democrats did not get the drug plan they wanted, and many conservative Republicans are simply appalled at the expense: "We are saddling future generations with enormous liabilities," said Sen. Don Nickles, R-Okla.

Narrow approval in the House and reluctant passage in the Senate are tell-tale signs not of triumphant compromise, but deep misgivings about what was accomplished. Only the nation's drug companies are absolutely sure.

For its part, Big Pharm's trade association, PhRMA, posted an announcement on its president, Alan Holmer's web page that was emphatically jubilant about the historic victory for seniors and disabled persons," not to mention Big Pharm, eh, Brother Holmer? Amen.

AHLA's Health Law Highlights: House Clears Bill Allowing FDA To Require Pediatric Drug Testing.

On November 19, the House passed by voice vote a bill that would give the Food and Drug Administration (FDA) clear statutory authority to require drug companies to conduct appropriate pediatric clinical trials on medicines taken by children. The measure (S. 650) cleared the Senate by a unanimous vote in July. The bill would restore the FDA's so-called pediatric rule, which was invalidated by the U.S. District Court for the District of Columbia in October 2002. The court found that the FDA had exceeded its authority in imposing certain pediatric testing requirements on drug manufacturers. (Association of Am. Physicians & Surgeons v. Food and Drug Admin., No. 00-02898 (D.D.C. Oct. 17, 2002)). To read the "Pediatric Research Equity Act of 2003," search for S. 650 here.

House tentatively passes Medicare drug bill after lengthy vote.

It took a 3-hour roll call that ended at 3 a.m. Saturday morning, and the GOP leadership had to quell a rebellion among their more conservative members, but the House passed the Medicare reform bill in the wee hours of the morning today, 220-215, with nearly all Democrats voting against. Here's the AP wrap-up story. The bill goes to the Senate now, where Sen. Ted Kennedy (D-Mass.) is threatening to filibuster, over the objections of his own party leader, Tom Daschle (D-S.D.).