August 6, 2007

IN THIS ISSUE

Editor's Column: Compared To What?
Medicaid Drug Security Measure Could Cost Docs
Pontiac Hospitals Link Services
Congress Approves Kid's Program: $35 Billion, 5 Years
House Approves Rx Drug Imports
Economists Say High Spending, Doc Salaries Linked
Giuliani Pushes Free Market HC Solutions

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Editor's Column: Compared To What?

By JOSEPH WEISS, MD
A study in Health Affairs ( Health Affairs Nov-Dec 2006  w555-ff) on primary care practices in four other countries -- Australia, New Zealand the Netherlands and United Kingdom -- offers information valuable to us in Southeast Michigan.

The study found that in these four countries the use of Information Technology (IT) by primary care doctors averaged 90 percent (US physician average 28 percent). The technologies included not only the electronic medical record but electronic prescribing, electronic access to laboratory results and to the medical literature. In addition the physicians used IT to generate lists of patient diagnoses, pharmaceutical drug use, and to remind patients about dates for preventive care or maintenance treatment. That usage rate was 80 percent vs. US rate of 37 percent.

Case management reached 81 percent in the United Kingdom. The US rate is 36 percent. After-hours coverage, in which patients do not go to an emergency room but are seen by a physician or a nurse, averaged 90 percent in the four countries; in the United States that rate is 40 percent.

Finally, a poll of the doctors in the four countries asked the question: “How often do you think your patients experience difficulty paying for prescriptions?” The doctors estimated nearly 20 percent. The same question in a poll of U.S. physicians elicited the response of 51 percent.

American physicians can explain some of these discrepancies. We have no governmental support or financial assistance to pay for IT let alone to help us maintain or upgrade it. Our patients have no waiting for tests or surgery; no one surpasses us in these services.

But the difference between ourselves and our colleagues abroad has meaning to us. At the least we should:

(1) urge Congress for money for IT  (2) change our attitudes about after hours coverage; that is, reconsider our evening phone message: “if you think this is an emergency go to the hospital”; and (3) reassess our indifference to case management.

At the most, we should learn more about how physicians elsewhere in the world work their practice. As Emerson said: “Our best ideas come from others.”

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Medicaid Drug Security Measure Could Cost Docs

In what may end up being regarded as a misguided attempt to prevent fraud, federal legislators have seen fit to bury a costly and cumbersome prescription drug security measure in an Iraq War spending bill. The provision would require that Medicaid prescriptions be electronically submitted or written on special tamper-resistant pads. If that isn’t alarming enough, the effective date for the new policy is Oct. 1, 2007.

The move is intended to inhibit drug seeking individuals from filling fraudulent prescriptions – especially for narcotics -- through the Medicaid program.

“Michigan already has the Michigan Automated Prescription Service (MAPS) to track this information in a way vastly superior to the use of tamper-resistant pads,” said Colin Ford, MSMS state government affairs director. “In fact, MSMS along with the Michigan Hospice and Palliative Care Association helped fight an amendment to the bill creating the MAPS program that would have required these pads be used in Michigan.

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Pontiac Hospitals Link Services

In what has been described as a possible prelude to a merger, North Oakland Medical Center and St. Joseph Mercy Hospital, both in Pontiac, have agreed to refer baby deliveries from North Oakland to St. Joseph Mercy. As part of the deal North Oakland will close its neonatal intensive care and pediatrics units.

North Oakland intends to open a 40-bed acute-care for patients too ill for nursing home care, but who don’t need the full hospital services.

According to a report in the Detroit News, 366-bed North Oakland, which is operated independently, incurred a net operating loss of $10.4 million last year; 428-bed St. Joseph Mercy, owned by the Catholic health system Trinity Health experienced growing patient volume and finished in the black with revenues of about $14 million.

Under North Oakland Medical Centers' affiliation with St. Joseph Mercy Oakland, North Oakland will cut operating costs, in part through better purchasing arrangements. Independently operated North Oakland will close its neonatal intensive care and pediatrics units and refer patients to St Joseph. Baby deliveries will take place at St. Joseph, which is part of the larger Catholic health system Trinity Health.

While a merger is unlikely soon, owing to North Oakland’s reluctance to being acquired and its $38 million in construction debt from the 1980s, future consolidation is not out of the question, the News reported.

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Congress Approves Kid's Program:
$35 Billion, 5 Years

The Senate late last week voted 68-31 to approve legislation (S 1893) that would reauthorize SCHIP and expand funding for the program by $35 billion over five years, the Wall Street Journal reports (Lueck, Wall Street Journal, 8/3). Two independents, 18 Republicans and all 48 Democrats voted to pass the measure, with the 31 opposition votes coming from Republicans (Pear, New York Times, 8/3). The Senate would need 67 votes to override a potential presidential veto (Alonso-Zaldivar, Los Angeles Times, 8/3).

Sen. Debbie Stabenow (D-Mich.) said, "As lawmakers, we have a moral obligation to provide health care coverage for the millions of uninsured children. Health care should be a right, not a privilege, and covering every child is an important step toward this goal."

“The American Medical Association applauds the US Senate for passing legislation that will protect the health of America’s kids,” said Ron Davis, MD, AMA President and longstanding WCMSSM member. “The Children’s Health Insurance Program Reauthorization Act will help millions of American children who currently rely on CHIP, and the many more who are eligible for the program, but not yet enrolled.”

SCHIP expires on Sept. 30. The Senate Finance Committee in July finalized an agreement on SCHIP reauthorization that would increase five-year funding for the program from $25 billion to $60 billion by raising the federal cigarette tax from 39 cents to $1 per pack. Under the plan, the 6.6 million children currently enrolled in SCHIP would continue to receive benefits, and an additional 3.3 million children could be enrolled in the program (Kaiser Daily Health Policy Report, 7/31).

“America’s doctors urge Congress to finalize this legislation before CHIP expires…Congress must preserve access to health care for both America’s kids and seniors,” said Dr. Davis. “The AMA strongly urges the conference committee to include in the final legislation the House provisions in the CHAMP Act (HR 3162) that stop steep Medicare cuts to physicians.”

A White House spokesperson said President Bush's previous veto threat would stand, despite the large margin of support in the Senate, according to the Journal (Wall Street Journal, 8/3). The White House said the bill "goes too far in federalizing health care" (New York Times, 8/3).

The House on Wednesday voted 225-204 to approve its reauthorization legislation (HR 3162), which would increase SCHIP funding by $50 billion over five years and make changes to Medicare (Kaiser Daily Health Policy Report, 8/2).

HHS Secretary Mike Leavitt said that Congress was jeopardizing health care for children by passing bills that "the president will have no choice but to veto" (New York Times, 8/3). However, if conference committee members can reach a bipartisan agreement, the White House might "have to back down on its veto threat," according to some senior Republicans, the Los Angeles Times reports.

Senate Finance Committee ranking member Chuck Grassley (R-Iowa) said, "I hope to be able to talk to the president and just show how common sense dictates not vetoing this" (Los Angeles Times, 8/3).

Conference Committee
The bill now goes to conference committee, and negotiators will have "a formidable challenge in trying to work out differences" between the two bills, according to the New York Times. Democratic leaders' "strong commitment to the issue ... virtually guarantees" that the committee will reach a compromise before Sept. 30, when the program is set to expire, the New York Times reports. However, it is unlikely that a compromise bill would be acceptable to Bush (New York Times, 8/3).

The House version of the bill includes a larger expansion of the program, along with revisions to Medicare that include cuts to private Medicare Advantage plans and a reversal of a scheduled cut to physicians' Medicare reimbursements. The House and Senate versions also differ in the size of the tobacco tax increase, with the Senate supporting a 61-cent increase and the House supporting a 45-cent increase.

House and Senate lawmakers acknowledge that the Medicare provisions in the House bill, "intended to piggyback their way into law on the popularity" of SCHIP, will "complicate negotiations," according to CQ Today (Wayne, CQ Today, 8/2). The Journal reports that the House-proposed level of cuts to MA plans "is unlikely to survive the Senate" (Wall Street Journal, 8/3).

Senate Majority Leader Harry Reid (D-Nev.) said that it would be difficult for the Senate to approve a bill expanding SCHIP above $35 billion. Noting that the Senate legislation was drafted with bipartisan support, Reid said, "It is the compromise, and I think that is our figure," adding, "We're encouraged to move to conference with the House, and we're happy to work with them to try to get something we can sell over here" (Johnson, CongressDaily, 8/3).

Senate Finance Committee Chair Max Baucus (D-Mont.) said, "What's going to happen in conference? I have no idea." He added that the bills "are really two different animals, and when that happens, generally some other solution presents itself. ... There are all kinds of ways to do things around here" (Lengell, Washington Times, 8/3).

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House Approves Rx Drug Imports

The House passed legislation late last week permitting the importation of relatively inexpensive prescription drugs from places such as Canada, Australia and Europe.

The measure was enacted as legislators passed a $91 billion spending measure that will pay for farm subsidies and nutrition programs for the budget year beginning Oct. 1.

The bill, which passed by a 237-18 vote, faces a promised veto from President Bush because of its price tag. The administration also opposes the drug importation provision.

The wide-reaching measure is the last domestic spending bill to pass the House. It contains nearly $1 billion more than requested by the president. But the overall measure is more than $10 billion below comparable costs for the current budget year because it does not contain farm disaster aid and reflects lower crop subsidy costs due to the good farm economy.

The administration "strongly opposes" the drug provision, which would permit individuals, wholesalers and pharmacists to import lower cost U.S.-made and FDA-approved prescription drugs from Canada and other countries.

The White House says there is no system in place to protect consumers from counterfeit or unsafe drugs, but an administration policy statement stops short of an outright veto threat.

"I understand the intention to lower drug prices to the seniors, that is critically important," Rep. Mike Rogers, R-Mich., told the Associated Press "What we're doing is throwing open the gates to every (drug) counterfeiter in the world."

A move supported by drug companies to strike the drug importation provisions from the bill failed by a vote of 283-146.

Supporters of the idea say it would save consumers great sums by allowing them to purchase U.S.-made medications from other countries where they often sell for much lower prices than in the U.S. Under current law, consumers are permitted to buy a 90-day supply in Canada.

Overseas, drugs can cost two-thirds less than they do in the United States, where prices for brand-name drugs are among the highest in the world. In many industrialized countries, prices are lower because they are either controlled or partially controlled by government regulation.

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Economists Say High Spending, Doc Salaries Linked

Many health care economists maintain that the "partisan fight" over whether to "force cuts in prescription drug prices and insurance company profits" to expand health insurance to more U.S. residents is a "distraction from a bigger problem: the relatively high salaries paid to American doctors, and even more importantly, the way they are compensated," the New York Times reports. Salaries for U.S. physicians are two to three times higher than salaries for physicians in other industrialized nations. According to surveys conducted by medical practice management groups, U.S. physicians on average have annual salaries of $200,000 to $300,000, and specialists on average have annual salaries of more than $400,000. Physicians in Europe in 2002 on average had annual salaries of $60,000 to $120,000, according to a survey conducted in 2004 by the British government.

In addition, most U.S. physicians "are paid piecemeal, for each test or procedure they perform, rather than a flat salary," which provides them with "financial incentives to perform procedures that further drive up overall health care spending," the Times reports. Physicians also receive limited reimbursements for preventive care and "cognitive services," such as research into alternative treatments or advice provided to patients that does not involve medical treatment.

Alan Garber, a practicing internist and the director of the Center for Health Policy at Stanford University, recommends that U.S. physicians receive flat annual salaries, as well as bonuses based on the health of their patients. Peter Bach, a pulmonary physician at Memorial Sloan-Kettering Cancer Center and a former senior adviser to CMS, said, "I don't have a view on whether doctors take home too much money or not enough money. The problem is the way they earn their money" (Berenson, New York Times, 7/29).

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Giuliani Pushes Free Market HC Solutions

The United States "can reduce costs and improve the quality of care by increasing competition" and by "empowering patients and their doctors," presidential candidate and former New York City Mayor Rudy Giuliani (R) wrote in a Boston Globe opinion piece. He added, "We can do it through tax cuts, not tax hikes." According to Giuliani, the Democratic presidential candidates support a "government-mandated model that looks for inspiration to the socialized medical systems," but "[i]nstead of being more like Europe, we need to be more like America."

The United States "has the best medical care in the world," but the health care system "is being dragged down by decades of government-imposed mandates, wasteful bureaucracy and massive distortions in the U.S. tax code," Giuliani wrote. "We need to begin by bringing fairness to the tax treatment of health care," Giuliani writes, adding that the current tax code system "penalizes millions ... who pay for insurance on their own and receive no tax benefit." He recommends implementation of his proposal to provide U.S. residents with tax deductions to purchase individual health insurance.

In addition, Giuliani recommends caps on non-economic damages in medical malpractice lawsuits, adding, "Doctors and nurses who have devoted their lives to helping others are relocating or leaving the practice of medicine altogether because they literally can't afford the insurance against frivolous lawsuits."

He concluded, "The future of America's health care system lies in free-market solutions, not socialist models. ... That's the American way to reform health care" (Giuliani, Boston Globe, 8/3).

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