AHLAlerts: American Health Line’s Blog

As health reformers move to implement provisions of the federal health overhaul, they must work to balance responsibilities with insurers, while simultaneously ensuring that the system does not rely primarily on government control. To that end, bloggers have their recommendations, and of course, their skepticism.

Joseph Paduda in “Managed Care Matters” recommends that officials decide whose job it is to manage health care costs under the law. He asks, “In return for getting millions of new members, aren’t health plans supposed to figure out how to manage care and control costs?” Paduda continues, “Suppliers in any business seek to maximize profits,” adding, “Smart buyers will figure out how to find more cost-effective suppliers, develop alternative supply chains, or in very tight supply markets even resort to vertical integration, setting up their own suppliers.” He notes, “I see no reason health plans can’t do the same.” According to Paduda, “There’s far too much ‘old thinking’ among health plans; they remain overly concerned with the size of their network directory, believing large provider networks are essential to success.”

Meanwhile, David Dranove posits in “The Health Care Blog” that Medicare advisors might become “accidental socialists” while seeking to reform health care. He writes that the Obama administration “has hired an army of academics to implement the new reforms,” who mostly agree that the solution to fixing the U.S. health system is “a combination of greatly expanded government insurance and a tightly regulated private insurance market.” However, he writes, “this solution does not end with a government takeover of health insurance.” He notes, “There isn’t a public or private health insurer anywhere in the world that doesn’t directly intervene in the delivery of medical care,” adding, “Socialized insurance necessarily leads to socialized medicine, and if the government controls well over half of the insurance sector through Medicare and Medicaid, and tightly regulates the rest, it is only inevitable that it will also seek to control how health care is bought and sold.” Dranove writes, “I fear that the regulatory behemoth [reformers] have been entrusted to manage is too big for them, despite their talents.” According to Dranove, “Ten years from now, we will look back at these days as the beginning of the end of market-based medicine in America.”

by Matthew Wayt, staff writer

What’s the most-important health care news of the day? Subscribers to First Look find out by 8:30 a.m. ET. Start every morning with First Look, American Health Line’s free roundup of the key policy, strategic and clinical developments shaping health care. See a sample issue or subscribe by clicking HERE.

The body mass index, which is a person’s weight in relation to height, is widely used by medical professionals and health experts to determine if the person is at healthy weight, underweight or obese. However, BMI can be deceptive.

• “Weight Index Doesn’t Tell the Whole Truth“: Some medical experts note that BMI does not “differentiate between fatty and lean tissue,” according to New York Times health columnist Jane Brody. That’s a problem because fat “takes up about four times the space of muscle tissue,” which could cause some people “to look and feel fatter” if their height and weight remain the same as they age and their muscle tissue capacity decreases. Brody also notes that if an individual is classified as being “underweight” or at “healthy weight,” they could be “easily lulled into a false sense of security” as “thinness is not necessarily healthy” (Brody, New York Times, 8/30).

Since November 2008, Dana Jennings of the New York Times has been sharing with readers facets of his life as a patient undergoing treatment for prostate cancer.

• “A Rush to Operating Rooms That Alters Men’s Lives“: In Jennings’ latest column, he writes that although prostate cancer “itself never did any damage” to his physical and mental self, it was “the treatments that razed me — the surgery, radiation and hormones producing a catalog of miseries that included impotence, incontinence and hot flashes.” Jennings writes that “a small voice kept whispering: What if this is all a lie? A dark conspiracy of the global medical-industrial complex?” For the column, he showcases a new book — titled “Invasion of the Prostate Snatchers” — that “effectively confirm[s] my whimsical paranoia” (Jennings, “Well,” New York Times, 8/30).

Since the health reform law was enacted in March, there have been quite a few media reports of companies laying off workers or taking on millions of dollars in additional charges to offset new costs under the reform law. Invariably, critics have used these examples to boost their arguments against the overhaul.

• “As Reform Improves The Overall Market, Inefficient Insurers Could Take Hits“: The New Republic‘s Jonathan Cohn, in a Kaiser Health News column, cites the example of conservative columnist Michelle Malkin, who used the news of Milwaukee-based Assurant Health’s recent decision to lay off 130 employees as an example of “job-killing” effect of the overhaul. However, Cohn cautions against such a quick judgment. He writes, “To be clear, sometimes reform really will reshuffle the health care economy in ways that make it worse,” but adds, “It’s to promote a more efficient economy, while making sure the unemployed have jobless benefits, training for new work and actual jobs they can take” (Cohn, Kaiser Health News, 8/30).

by Santosh Rao, senior writer

What’s the most-important health care news of the day? Subscribers to First Look find out by 8:30 a.m. ET. Start every morning with First Look, American Health Line’s free roundup of the key policy, strategic and clinical developments shaping health care. See a sample issue or subscribe by clicking HERE.

The Obama administration on Tuesday announced that about 2,000 employers and unions will be eligible for a program that would reimburse younger retiree’s medical bills through a $5 billion federal fund created under the federal health reform law, the Wall Street Journal reports. Retirees between ages 55 and 64 are not yet eligible for Medicare but often incur some of the highest costs for employers. The federal program allows employers to access the $5 billion fund and be reimbursed for up to 80% of certain health costs for such retirees.

HHS said that around 1,900 employers have qualified for the funds so far, including Alcoa, General Electric, General Motors, PepsiCo, Procter & Gamble and Pfizer. HHS Office of Consumer Information and Insurance Oversight Director Jay Angoff said the agency is still taking applications for the program but would not say how many applicants have been declined.

The high number of eligible companies has caused some employers to worry that the program will run out of funding before it expires in 2014, when the overhaul will prevent insurers from denying care to older U.S. residents. James Klein, president of the Americans Benefits Council, compared the program to the “cash for clunkers” subsidy, which became unexpectedly popular and ran out of money before its original end date (Adamy, Wall Street Journal, 8/31).

– compiled by Matthew Wayt

What’s the most-important health care news of the day? Subscribers to First Look find out by 8:30 a.m. ET. Start every morning with First Look, American Health Line’s free roundup of the key policy, strategic and clinical developments shaping health care. See a sample issue or subscribe by clicking HERE.

Pharmaceutical giant Johnson & Johnson in the past year has issued 11 product recalls, including on 136 million bottles of children’s and infants’ non-prescription drugs. If the industry were high school, the company would surely be in the running for “Least Popular” in the school yearbook. Today’s “Interesting Reads” takes a look at how J&J is working to rebuild its image after the recalls and what CEO William Weldon is doing to make sure he doesn’t lose prom king when he retires late next year.

• “J&J Says Lessons Learned in Recalls“: In a recent interview, Weldon said the company has “learned a lot of lessons,” adding, “They’ve been very painful.” As the company works to rebuild trust among its customers, Weldon said J&J has checked the quality standards at its 120 factories and realigned its supply chain to ensure that “best practices” were shared. J&J has also set up an organizational structure with executives that focus solely on quality. Weldon said that the company is doing everything it can “to make sure this never happens again” (Johnson, AP/Philadelphia Inquirer, 8/28).
• “J&J Chief Tends Corporate Wounds“: The legacy of Weldon, who is expected to retire in late 2011, is likely to depend on how J&J weathers the recalls and subsequent federal investigations, according to the Wall Street Journal. Sources close to Weldon say that he is “likely to draw on a careful, low-key approach to decision-making,” the Journal reports. Weldon also is likely “to stick around and fix” J&J’s problems that led to the recalls, rather than retiring early, one source close to the CEO said (Lublin/Rockoff, Wall Street Journal, 8/30).

by Brittany Hackett, senior staff writer

What’s the most-important health care news of the day? Subscribers to First Look find out by 8:30 a.m. ET. Start every morning with First Look, American Health Line’s free roundup of the key policy, strategic and clinical developments shaping health care. See a sample issue or subscribe by clicking HERE.

FDA in September will launch inspections of about 600 top-producing egg farms in response to the recent salmonella outbreak that prompted the recall more than 500 million eggs, the AP/Philadelphia Inquirer reports. According to the AP/Inquirer, the inspections are expected to focus on the largest farms that provide 80% of the nation’s egg supply, and they are scheduled to be completed by end of 2011 (Jalonick, AP/Philadelphia Inquirer, 8/29).

Last week, FDA officials said they had found a preliminary link between the outbreak and bacteria found in chicken feed used at the two Iowa farms that distributed the eggs that were recalled. CDC officials also announced that at least 1,470 cases of salmonella have been linked to the outbreak. FDA officials said the investigation is ongoing as scientists analyze about 600 samples from 24 possible sources of contamination at the two Iowa farms (American Health Line, 8/27).

An Obama administration official, who discussed the inspection plans but declined to be identified because the plan has not yet been officially announced, said that the farms deemed the highest risk to consumer safety will be inspected, as well as all farms that have 50,000 or more hens. The inspections will be the first government effort to monitor large egg farms, which mostly have gone uninspected for decades.

As part of the inspection process, FDA inspectors will undergo retraining based on the findings of the inspections currently being conducted at the two Iowa farms, the administration official said. As part of the inspections, the agency inspectors are likely to look for:

• Safety violations that could raise the risk for salmonella contamination of the egg supply;
• Proper refrigeration of the eggs and adherence to employee sanitation standards; and
• Unsafe bacteria around the farms.

In addition, FDA is expected to enforce its new egg rules, which would require egg producers to test for salmonella more frequently and take other precautions. The new rules are a revision of decade-old rules that first were implemented during the Clinton administration. The rules are expected to receive a boost from new food safety legislation. The House approved a food safety bill (HR 2749) in July 2009 and a similar bill (S 510) is pending in the Senate (AP/Philadelphia Inquirer, 8/29).

Federal, State Officials Knew Of Salmonella Risk Two Weeks Before Recall

CDC and FDA officials and their counterparts in at least three states were aware of the potential risk for a salmonella outbreak from eggs distributed by Wright County Egg, one of the two Iowa egg farms, about two weeks before the national recall was announced, USA Today reports. According to Ian Williams, chief of CDC’s outbreak response branch, the agency in late July considered issuing a public reminder about the dangers of eating undercooked eggs.

However, Williams said CDC decided that the message would be more effective if they waited for FDA to complete its investigation of the Wright County egg farm. According to USA Today, health officials in California and Minnesota in late July identified several outbreaks of salmonella linked to restaurants that had received their egg supplies from the Wright County egg farm. However, the national recall officially was announced only on Aug. 13 (Young, USA Today, 8/26).

– compiled by Santosh Rao

What’s the most-important health care news of the day? Subscribers to First Look find out by 8:30 a.m. ET. Start every morning with First Look, American Health Line’s free roundup of the key policy, strategic and clinical developments shaping health care. See a sample issue or subscribe by clicking HERE.

The U.S. Court of Appeals for the Federal Circuit on Friday ruled that vaccines are not a cause of autism, upholding a 2009 special vaccine court decision, the AP/Baltimore Sun reports.

Although scientists years ago determined no such link, more than 5,500 families sought compensation through the federal Vaccine Injury Compensation Program, arguing that childhood vaccines led to their children’s conditions. However, the 2009 ruling by Special Master Denise Vowell said that the autism-vaccine link “is weak, contradictory and unpersuasive.” She added, “Sadly, the petitioners in this litigation have been the victims of bas science conducted to support litigation rather than to advance medical and scientific understanding” of autism (Schmid, AP/Baltimore Sun, 8/27). The federal “vaccines court” in March 2010 confirmed Vowell’s ruling, stating in three separate cases that the preservative thimerosal, which contains mercury, does not cause autism (American Health Line, 3/16).

The appellate court panel “carefully reviewed the decision of the special master and we find that it is rationally supported by the evidence, well-articulated, and reasonable.” It added, “We, therefore, affirm the denial of the [plaintiff's] petition for compensation.”

According to the AP/Sun, the two decisions should “offer reassurance” to parents concerned about vaccinating their infants because of the claims of the anti-vaccine movement, which may contribute to the rise of several preventable diseases, including measles (Schmid, AP/Baltimore Sun, 8/27).

– compiled by Brittany Hackett

What’s the most-important health care news of the day? Subscribers to First Look find out by 8:30 a.m. ET. Start every morning with First Look, American Health Line’s free roundup of the key policy, strategic and clinical developments shaping health care. See a sample issue or subscribe by clicking HERE.

The California Legislature and a Washington, D.C., district court could hardly be farther apart, but that’s where we’ll go to review this week’s biggest health policy stories. The Golden State became the nation’s first to pass legislation to enact the health care exchanges mandated under the federal health reform law. Meanwhile, a judge in the nation’s capitol temporarily banned federal funding for embryonic stem cell research, sending proponents and researchers scrambling for ways to overturn his decision.

Of course, there’s news from middle America — where a pair of farms in Iowa are linked to a salmonella outbreak that forced the FDA to admit it can’t safely oversee the nation’s food supply — and even chain restaurants, where patrons of places like Outback Steakhouse soon will see just how many calories are in that Bloomin’ Onion.

Here’s what you need to know about this week’s five key health policy stories.

CALIFORNIA EXCHANGIN’: The California state Legislature on Wednesday gave final approval to the second of two bills to establish the California Health Benefit Exchange, paving the way for California to become the first state in the nation to create a health insurance exchange under the federal health reform law. The exchanges, which are intended to provide coverage options for individuals and small businesses, are required to be fully operational by January 2011.

Earlier this week, the Legislature approved SB 900, which would set up the state’s insurance exchange to help consumers compare information about insurers before choosing a health plan. The second bill, AB 1602, would delineate the duties of the exchange.

Both measures now go to Gov. Arnold Schwarzenegger (R), who is expected to sign them into law. California’s health benefits exchange is likely to be the largest exchange operated by a single state, with as many as 8.3 million residents expected to be eligible for coverage.

NO FUNDING FOR YOU: U.S. District Court Judge Royce Lamberth on Monday issued a preliminary injunction against President Obama’s March 2009 executive order allowing federal funding for embryonic stem cell research. Lamberth’s ruling also temporarily blocks NIH from providing financial grants for the research under new guidelines by the Obama administration.

A March 2009 executive order by President Obama paved the way for NIH to issue new guidelines for assessing whether newly created embryonic stem cell lines could be used for federally funded research, as well as to clarify how old lines would be evaluated. In December 2009, NIH authorized the first 13 lines of embryonic stem cells under the new guidelines. Since then, a total of 75 stem cell colonies have been approved.

However, in his 15-page ruling, Lamberth said that the Obama administration’s policy to expand federal funding for embryonic stem cell research violated a 1996 law known as the Dickey-Wicker Amendment. Lamberth wrote, “As demonstrated by the plain language of the [1996 law], the unambiguous intent of Congress is to prohibit the expenditure of federal funds on ‘research in which a human embryo or embryos are destroyed.’”

Of course, that’s not the end of it. The Department of Justice on Tuesday said it would appeal the ruling. Obama administration officials warned that if the ruling is upheld, it could eliminate Obama’s executive order and more restrictive rules issued by President George W. Bush. As a result, the ruling could affect embryonic stem cell research and scientific projects exploring novel approaches to vaccines, viruses and other diseases, because cells used in those types of research often are derived from aborted fetuses or destroyed embryos.

Several lawmakers on Tuesday echoed the administration’s concerns and urged Congress to reconsider previously introduced legislation that would have codified ethical restrictions on stem cell research.

HIGHER EGGS-PECTATIONS FOR FDA: A Commissioner Margaret Hamburg on Monday said her agency lacks sufficient oversight authority to prevent salmonella outbreaks similar to the one that caused the recent recall of nearly 500 million eggs. According to Hamburg, FDA needs to be better equipped to implement preventive controls and hold companies accountable for failing to meet safety standards.

Lack of oversight has become increasingly problematic across the last several years as food industries have begun consolidating, a trend that has fostered a market populated with larger businesses that control a majority of the nation’s food supply.

Seeking to bolster FDA’s authority over food safety, the Obama administration in July passed the so-called “egg rule.” The rule requires egg producers to test for salmonella more frequently and take other precautions. However, while Hamburg said FDA is taking the egg recall “very, very seriously,” she urged Congress to pass broader food safety legislation, which would increase the frequency of inspection and allow FDA to issue recalls. Currently, private companies issue recalls voluntarily.

SIMPLIFYING PART D COULD COMPLICATE THINGS: Medicare rule changes intended to make it simpler for beneficiaries to pick prescription drug coverage could cause more than three million beneficiaries to change their plans in 2011, according to an analysis published this week by Avalere Health. When other changes are taken into account, as many as 3.7 million beneficiaries — 20% of the 17.5 million beneficiaries enrolled in stand-alone drug plans — might be forced to switch plans.

The rule changes are intended to decrease duplicative plans offered by the same insurer. Medicare already has notified insurers that they will no longer be permitted to offer more than one “basic” drug plan in a given region, a practice employed by several major prescription plans, including CVS-Caremark and AARP. Eliminating those duplicate plans would result in 2.75 million beneficiaries needing to find new coverage. Another new rule will require insurers that offer multiple enhanced coverage plans to show that they are different. In 2010, almost 1,600 plans were available, many of which lacked significant differences from each other, according to the analysis. Medicare is expected to release its list of drug plans for 2011 in late September. The options available in each state could drop from more than 40 per state to about 30.

Medicare officials disagreed with Avalere’s estimates.

MY BURGER HAS HOW MANY CALORIES?!?!: FDA on Tuesday released draft guidelines for a rule included in the federal health reform law that require restaurants with more than 20 locations and vending machine operators with more than 20 machines to prominently display calorie counts for food choices. The guidelines require calorie information in restaurants to be posted in the same size type as the menu item or price, depending on which is larger. Menus also must include a statement saying, “Additional nutrition information is available on request,” and restaurants will be responsible for providing such details if a customer asks.

FDA has until March 2011 to enforce the rules but the agency will delay implementation for an unspecified time to allow companies to make the necessary changes. FDA asked for public comments on how long it should delay enforcing the rules

By Anthony Wilson, Editor

TELL US WHAT YOU THINK: What will the U.S. courts ultimately rule on the embryonic stem cell issue? Will lawmakers step in to codify the rules for funding such research? What should FDA do to improve food safety? And just how many calories does the Bloomin’ Onion have? Let us know your answers on these questions or what you think about any health policy topics in the comments section below.

—

What’s the most-important health care news of the day? Subscribers to First Look find out by 8:30 a.m. ET. Start every morning with First Look, American Health Line’s free roundup of the key policy, strategic and clinical developments shaping health care. See a sample issue or subscribe by clicking HERE.

Just because Congress is in recess doesn’t mean that Republicans have stopped flinging insults at the federal health reform law. Meanwhile, Virginia Attorney General Ken Cuccinelli’s (R) case challenging the overhaul took an odd turn today as HHS Secretary Kathleen Sebelius politely noted that Cuccinelli named the wrong defendant in his suit.

Michael Leavitt, HHS Secretary under President George W. Bush, “slam[med]” the health reform law as a threat to Medicare” in a Washington Post op-ed on Friday, writes Mike Lillis for The Hill‘s “Healthwatch.” Leavitt not only wrote that the legislation weakened the program, but also “create[s] a perception of progress, making it more difficult to pursue the reforms that would put Medicare on sound financial footing so future generations of seniors will benefit.” According to Lillis, “Medicare’s own actuaries have warned the savings stemming from the law can’t be used simultaneously to extend Medicare’s solvency and expand coverage to millions of uninsured Americans” and “[i]t’s an accounting trick that Republicans have picked up on.”

Even though GOP lawmakers and officials have proposed repealing and replacing the law, their best shot at overturning it likely was through the court system. However, HHS Secretary Kathleen Sebelius on Friday threw a curveball that could disrupt their plans.

Ken Cuccinelli’s “lawsuit names [Sebelius] as the defendant, but Sebelius says he ‘got the list of defendants wrong,’” Igor Volsky writes at Think Progress’ “The Wonk Room.” In her response to the judge — who ruled earlier this month that Cuccinelli’s individual mandate case could proceed — Sebelius noted that the Secretary of Treasury actually is responsible for the administering the minimum coverage provision mentioned in the suit. Volsky continues, “Cuccinelli may be able to amend his complaint and add the necessary party, but this could also force the judge to make a finding that the mandate is administered by the Treasury Department, which itself would undermine Cuccinelli’s claim that the mandate is not a tax.” Oops!

by Cassandra Blohowiak, staff writer

What’s the most-important health care news of the day? Subscribers to First Look find out by 8:30 a.m. ET. Start every morning with First Look, American Health Line’s free roundup of the key policy, strategic and clinical developments shaping health care. See a sample issue or subscribe by clicking HERE.

As the initial implementation of the federal health reform law continues, some within the health care system are starting to predict what new models will be implemented to provide care to those in the U.S. Today’s “Interesting Reads” takes a look at two models that are beginning to emerge around the country.

• “Future of Primary Care? Some Say ‘Medial Home’“: The idea of a “patient-centered medical home” is gaining momentum across the U.S., offering patients more time with primary care doctors who focus on fewer patients, NPR’s “All Things Considered” reports. In such models, primary care doctors are able to pass more time-consuming tasks to medical providers with less specialized training, allowing them to focus on tracking patients and keeping them healthy. Lisa Letourneau, a primary care physician who leads a Maine-based non-for-profit regional health care collaborative that builds medical homes in the state, said that the idea is to have all providers “practicing at the top of their license” and performing tasks they are most trained to do. However, the success of medical homes will be determined by “whether it actually saves money” and whether physicians and their patients can undergo a “serious attitude adjustment,” according to “All Things Considered” (Rovner, “All Things Considered,” NPR, 8/26).
• “Can Concierge Medicine for the Few Benefit the Many?“: The number of so-called “concierge” medical practices — in which patients pay retainer fees for 24-hour access to their physician — are likely to increase as the idea becomes more acceptable and patients begin to demand more attention from their PCPs, the New York Times reports. Under concierge practices, physicians have as few as 500 patients, allowing them to hold longer visits and immediate accessibility and, sometimes, house calls and accompanied visits to specialists. Retainer fees for such services range from about $2,000 to as much as $15,000 annually. However, the system is not without its critics, who argue that doctors are abandoning some patients and creating a “two-tiered” system that increase already existing disparities in health care, the Times reports (Chen, New York Times, 8/26).

by Brittany Hackett, senior staff writer

What’s the most-important health care news of the day? Subscribers to First Look find out by 8:30 a.m. ET. Start every morning with First Look, American Health Line’s free roundup of the key policy, strategic and clinical developments shaping health care. See a sample issue or subscribe by clicking HERE.

Faced with increasing pressure to cover rising health benefits costs amid tighter budgets, some state and local governments are asking workers to assume more of their health care costs, the Wall Street Journal reports. According to the Journal, Connecticut, Kentucky, Texas and several other states this year have made changes to their workers’ health benefits contributions. In addition, an increasing number of governments in recent years have reduced public sector employees’ health benefits without major challenges.

However, public workers and employee unions in at least two states — Michigan and New Jersey — have filed lawsuits against the states for forcing them to contribute more toward the costs of their health benefits. For example, in Michigan, a plan to require state workers to pay 3% of their monthly earnings in the next fiscal year toward a trust fund for retiree health benefits “met firm resistance,” the Journal reports. The lawsuits in the two states are expected to be closely monitored by other states that are facing problem providing employee benefits.

Gap Between Private, Public Sector Contributions

State and local governments’ efforts to extract from their workers larger contributions toward health care costs come as awareness grows of the disparity between what public and private sector employees pay for coverage, the Journal reports. Some critics have said that public school employees pay far less for health benefits than private sector employees, some of whom receive no assistance from their employer in purchasing coverage. Representatives of private sector employers and workers said that the shift is necessary to balance the contributions to health care costs between private and public sector workers.

The Michigan Chamber of Commerce endorsed the plan to increase state workers’ contributions because it would ensure parity between the private and public sector contributions toward retiree health care. Wendy Block, a health policy lobbyist for MCOC, said it was “unrealistic to think that employees in the public sector shouldn’t have to pay anything toward their health care costs.” Block noted that without additional adjustments to health care contributions, “the state cannot maintain these obligations without busting the state budget” (Neumann, Wall Street Journal, 8/27).

– Santosh Rao

What’s the most-important health care news of the day? Subscribers to First Look find out by 8:30 a.m. ET. Start every morning with First Look, American Health Line’s free roundup of the key policy, strategic and clinical developments shaping health care. See a sample issue or subscribe by clicking HERE.