Sunday, December 17, 2006

Earmarks and P4P

"Medicare now pays the same amount regardless of quality .... even rewards poor quality,paying doctors to treat complications caused by their own mistakes."
Senators Charles E. Grassley, Republican of Iowa, the outgoing chairman of the Senate Finance Committee

“I am very skeptical of pay-for-performance. I’m not sure we can measure quality and performance that well."
Representative Henry A. Waxman, Democrat from California

Dear Friends and Colleagues:
Attached two recent articles from the New York Times highlighting two important issues: 1) last minute insertion of earmarks or special provisions into bills that favor pet projects for certain constituencies , 2) Pay-For-Quality measures in Medicare bill.

1) Earmarks or special provisions are increasing in an exponential fashion.Whereas Congress spent $10 billion on 1,439 such projects in 1995, it ran ran up $27.3 billion for a record 13,997 such projects last year, according to the nonpartisan Citizens Against Government Waste.
That means that our tax money is being used to satisfy the insatiable appetite of congress to funnel money away from budgeted projects to please local constituents. Medicares budget serves just as one example how precious resources are being squandered by politicians.Unfortunately, payment to doctors are being cut year by ear, if one takes inflation and increased practice expenditures into consideration. What can we do? Ally with our patients to point out those abuse by politicians and their financial backers and target them in the media. Lets not forget that doctors are also have their lobby in Washington, but we need to align our interests with the public to promote public health and not only our financial well being.

2) After averting a major pay cut, doctors have to prepare themselves for the next challenge: Pay-for-Quality. Now, doctors can qualify for a 1.5 percent bonus in the second half of 2007 if they report data on the quality of their care, using measures specified by the government. For example, doctors could be asked to report how often they prescribe a particular drug after a heart attack or how well they control blood pressure in patients with diabetes.Beyond broader questions about whether the government can accurately measure the quality of care, many are concerned about the feasibility of developing standards for hundreds of thousands of doctors within six months. The quality reporting system begins on July 1.
In a recent speech to the American Medical Association, Dr. Scott Gottlieb, deputy commissioner of the Food and Drug Administration, said he worried about intrusions into the practice of medicine by federal agencies, including his own.
We have several choices left: boycott Medicare and opt-out of the system or insist that we ONLY participate in such quality assessment program if they criteria are being developed with our significant input.
In my opinion, we cannot objectively measure quality in the ambulatory setting, unless we have tools i.e. medical information technology available and successfully implemented in the clinical practice. Then we should start with pilot projects to validate the feasibility of those assessments including outcome measures.
At this moment I think our elected politicians FROM BOTH PARTIES are shoveling those P4P measures down our throat.
My tip: don't swallow.

December 15, 2006
Last-Minute Inserts Offer Benefits in Medicare Bill

WASHINGTON, Dec. 14 — By slipping four sentences into a big bill passed last week, Speaker J. Dennis Hastert secured a major change in Medicare policy avidly sought by a few health insurers, in particular a multinational company with headquarters in his home state, Illinois.

In the final hours of the 109th Congress, the Senate Democratic leader, Harry Reid of Nevada, also got special treatment for a hospice in his state. The bill did not name the hospice, but specified the Medicare provider number for the intended beneficiary, the Nathan Adelson Hospice in rural Pahrump, Nev.

Representative Bill Thomas, Republican of California, inserted a provision earmarking $40 million for a valley fever vaccine sought by his constituents, while the Senate Republican leader, Bill Frist of Tennessee, obtained tens of millions of dollars for hospitals in his state.

These examples illustrate how power is exercised in the final, chaotic hours before Congress adjourns. Obscure provisions of interest to just a few lawmakers were quietly stuffed into a grab bag of legislation, with no indication of their parentage or purpose.

The White House has indicated that President Bush will sign the bill, which deals not only with health care but also with a variety of tax and trade issues. The bill, for example, creates a special tax depreciation allowance for property used to produce ethanol from corn stalks, regulates the use of wine names like Champagne and Chablis, and suspends the tariff on imported rayon fibers used in making certain tampons.

Mr. Hastert’s provision showed up mysteriously after House and Senate negotiators had finished writing the bill. The provision was added by the House Rules Committee, just a few hours before the bill went to the House floor last week.

Congressional aides, Medicare officials and insurance lobbyists said the main proponent of the measure was the Aon Corporation and its subsidiary, Sterling Life Insurance Company. Aon, a Fortune 500 company, is based in Chicago and does business in more than 120 countries.

Under current law, Medicare beneficiaries can sign up for a prescription drug plan or a private Medicare Advantage plan from Nov. 15 to Dec. 31 each year. They have a limited ability to make changes through March 31 and are generally locked in for the remainder of the year.

Mr. Hastert’s amendment permits certain Medicare Advantage plans, like Aon’s, to enroll people throughout the year. Ron Bonjean, a spokesman for Mr. Hastert, said the purpose was “to get more people enrolled in Medicare Advantage plans.” Al Orendorff, a spokesman for Aon, said, “We are not going to comment.”

The provision could benefit several other insurers, but Larry Oday, a lawyer and lobbyist for Aon, said the company was “actively involved in consideration of this piece of legislation” and had led opposition to the lock-in requirement.

The addition of the provision infuriated Senate negotiators from both parties.

Senator Charles E. Grassley, the Iowa Republican who is chairman of the Senate Finance Committee, said the provision did not go through the regular legislative process.

“It disturbs me that this major policy change — one that treats some plans unfairly — was included at the last minute by the House Rules Committee,” Mr. Grassley said.

The senior Democrat on the Finance Committee, Senator Max Baucus of Montana, said: “I soundly rejected this proposal during negotiations with our House colleagues. They were clearly informed of my position. Our final agreement did not include this provision.”

Mr. Reid’s amendment provided $3.8 million in relief to the Nathan Adelson Hospice. Medicare officials said they had overpaid the hospice and were trying to recover that amount.

Mr. Reid said the legislation would overturn “a flawed administrative ruling” by the federal Centers for Medicare and Medicaid Services. The legislation retroactively designates the Adelson hospice in Pahrump as a branch of one in Las Vegas, making more money available.

Hospice trustees used their influence with the state’s Congressional delegation, and the hospice retained a Washington law firm, Hogan & Hartson. But Carole A. Fisher, president of the hospice, said Mr. Reid and Nevada’s Republican senator, John Ensign, “were the real champions of our cause, who ensured that we got relief from our Medicare debt.”

In Tennessee, hospitals estimate that they will get at least $131 million because of the provision added by Mr. Frist, who is retiring from the Senate next month. The money will go to about 90 hospitals serving disproportionate numbers of low-income Medicaid patients and people without insurance.

Craig A. Becker, president of the Tennessee Hospital Association, said his organization had received help from an influential Washington lobbyist: Thomas A. Scully, former administrator of the Centers for Medicare and Medicaid Services, who is now a lawyer at Alston & Bird.

The same section of the bill provides $10 million for hospitals in Hawaii. That state’s senators, Daniel K. Akaka and Daniel K. Inouye, both Democrats, have been trying to get such an allotment for years.

Hawaii, like Tennessee, is exempted from many requirements of the federal Medicaid law because of a waiver granted by federal officials. The waivers give the states a great deal of freedom in setting eligibility and benefits, but do not provide the extra money available to other states for hospitals serving large numbers of poor people.

In seeking money for a vaccine against valley fever, Mr. Thomas said he was addressing a serious health problem caused by inhalation of a soil-borne fungus in southwestern states.

“The disease is especially prevalent in Kern County, Calif., which I represent,” Mr. Thomas said. “Unfortunately, there is no vaccine for valley fever, and there is no private industry interest in making the investment, estimated at $40 million, needed for development of the vaccine.”

Among those seeking the legislation was Sandra P. Larson, executive director of the Valley Fever Americas Foundation in Bakersfield, Calif. “Thomas is the guy who got this done for us,” Ms. Larson said. “We are so appreciative.”


December 12, 2006
Medicare Links Doctors’ Pay to Practices

WASHINGTON, Dec. 11 — After years of trying to rein in the runaway cost of the Medicare program, Congress has decided to use a carrot instead of a stick to change doctors’ behavior.

Doctors had been fearing a pay cut under Medicare, the health care program for 43 million elderly and disabled, but Congress instead has offered doctors a small bonus with big strings attached. To get the money, doctors will have to report how often they provide quality care, as defined by the government.

Lawmakers approved the change as one of their final acts before adjourning early Saturday morning, and proponents said it would improve the quality of medical care.

But the plan immediately raised concerns among some doctors and lawmakers who specialize in health issues. They said they worried that it could be a step toward cookbook medicine and could erode the professional autonomy of doctors.

Doctors had been facing a 5 percent cut in Medicare payments in 2007. Congress deferred the cut, freezing doctors’ payment rates instead.

Now, doctors can qualify for a 1.5 percent bonus in the second half of 2007 if they report data on the quality of their care, using measures specified by the government. For example, doctors could be asked to report how often they prescribe a particular drug after a heart attack or how well they control blood pressure in patients with diabetes.

With these statistics, Medicare officials say, they will , in the near future, be able to reward doctors who follow clinical guidelines and perhaps penalize those who flout such standards without justification.

For several years, Medicare officials have advocated a pay-for-performance system, noting wide regional variations in the practices of hospitals and medical specialists. The idea was supported by the Bush administration and by Senators Charles E. Grassley, Republican of Iowa, the chairman of the Finance Committee, and Max Baucus, the Montana Democrat who will be chairman next year.

“Medicare now pays the same amount regardless of quality,” Mr. Grassley said. Indeed, he said, Medicare “rewards poor quality,” paying doctors to treat complications caused by their own mistakes.

But some influential Democrats, and even some administration officials and Republicans who support the general idea of pay-for-performance, expressed concern with federal agencies setting benchmarks for care.

“This is a very significant step,” Catherine G. Cohen, vice president of the American Academy of Ophthalmology, said Monday. “It’s the first time Medicare has ever paid individual doctors a differential for reporting quality measures. It could impose a significant new burden on doctors’ offices.”

The legislation has created strange bedfellows.

Some doctors, health policy experts and politicians, including liberals like Representative Henry A. Waxman and conservatives like Robert E. Moffit, director of health policy studies at the Heritage Foundation, are apprehensive. Beyond broader questions about whether the government can accurately measure the quality of care, they are concerned about the feasibility of developing standards for hundreds of thousands of doctors within six months. The quality reporting system begins on July 1.

In an interview, Mr. Waxman, a California Democrat who has been working on health policy for more than three decades, said: “I am very skeptical of pay-for-performance. I’m not sure we can measure quality and performance that well.”

Representative Pete Stark of California, who will become chairman of the Ways and Means Subcommittee on Health in January, said, “The entire concept of pay-for-performance is offensive.” Doctors, Mr. Stark said, are supposed to provide “quality care” and should not be paid extra for doing so.

Moreover, he said, federal officials “do not have the capability, the understanding, the knowledge or the training” to set standards for the quality of care.

Representative Charlie Norwood, Republican of Georgia, led efforts to enact a “patients’ bill of rights,” saying insurance companies should not tell doctors how to practice medicine. He objects just as much to government efforts to define quality.

“When government bureaucrats determine what good medicine is, instead of patients and doctors, I get very suspicious,” said Mr. Norwood, a dentist.

The administration says Medicare should not simply pay for more services, but should reward doctors for efficiency and high-quality care.

Representative Nancy L. Johnson, Republican of Connecticut, also championed the idea of pay-for-performance. But in an interview, Mrs. Johnson said she was disappointed that Congress had not gone further to ensure that doctors would develop the criteria for measuring quality. “Bureaucrats must never be allowed to dictate medical practice,” she said.

This concern is shared by some administration officials. In a recent speech to the American Medical Association, Dr. Scott Gottlieb, deputy commissioner of the Food and Drug Administration, said he worried about intrusions into the practice of medicine by federal agencies, including his own.

The original Medicare law, passed in 1965, said, “Nothing in this title shall be construed to authorize any federal officer or employee to exercise any supervision or control over the practice of medicine.”

Mr. Moffit of the Heritage Foundation said the new initiative was “a backdoor attempt to repeal” this guarantee.

“It’s pay for compliance, not pay for performance,” Mr. Moffit said. “Doctors will be financially pressured to comply with government guidelines and standards. The integrity and independence of the medical profession could be compromised.”

Dr. Stephen C. Albrecht, a family doctor in Olympia, Wash., said Monday: “Medicare has a good idea here, but has not put much money behind it. The 1.5 percent bonus does not justify the extra effort required to do the quality reporting that the government wants.”

Some doctors, like anesthesiologists and thoracic surgeons, have been eager to develop their own quality measures.

Over the last 17 years, the Society of Thoracic Surgeons has collected demographic and clinical data on three million patients. Doctors say they have used the data to improve the quality of care.

Dr. Frederick L. Grover, president of the Society of Thoracic Surgeons, said, “We have provided feedback to doctors, comparing their performance with state and national benchmarks, and in this way we have significantly reduced mortality and complications.”

When possible, Medicare officials are supposed to use “quality measures” that have been endorsed by the private sector.

Despite the move toward pay-for-performance, Medicare payments to doctors are unlikely to keep pace with inflation. Congress postponed for one year a cut in fees but did not change the Medicare law’s formula for computing payments to doctors. They face an even bigger cut next year, in the range of 5 percent to 10 percent, ensuring that Congress will have to revisit the issue.

Representative Stark said, “Doctors and others who like pay-for-performance have to remember that it’s a zero-sum game.” As a result, he said, most doctors will have to accept lower fees if Medicare is to pay bonuses to the best performers.

Dr. Frank G. Opelka, a surgeon at the Louisiana State University School of Medicine in New Orleans, said: “We fully support the goal of enhancing the quality of care, but this is a new program. It will take some time to get broad acceptance by physicia

Helath Care Costs and Quality of Care

TOPIC: Healthcare Costs and Quality of Care

“The biggest failure of the American health care system is not that we overuse stuff but that we underuse stuff,”
(David Cutler, Economist,Harvard)

Dear Friends and Colleagues:
Attached two articles from the Miami herald and New York Times discussing the paradox of increasing health car costs and decreasing quality of care.
John Dorscher, the renowned Miami Herald health care reporter, reviews the costs, quality and outcome of medical care in South Florida.
Unfortunately, we have the highest per capita healthcare expenditures, but our performance is the lowest in the country.
In plain simple English: our patients (including your employees and families) or their insurance spent the most, but get the short end of the stick.
Among others the following factors contribute to this problem: fragmented health care system, uncoordinated health care delivery, poor or non-existing information sharing resulting in unnecessary duplication of diagnostic testing and absence of quality measures in ambulatory care setting.
Unfortunately, doctors are still resisting to conduct performance and outcome measure assessments.
These measures are not meant to be punitive, but to provide guidance for physicians to assess and compare their performance.
For that purpose I am using for more than seven years an electronic health records and routinely check if the treatment of my patients with certain chronic disease (Diabetes, Hypertension, Asthma) meets the standards of care and complies with national guidelines.
I learn a lot from those routine reviews and adjust my care accordingly.
If I can do it, why do we have to wait for the government to prescribe how we should practice medicine?
Lets take the initiative and implement modern business management principles in our practices including medical information technology.
Looking forward to your comments.
Happy Chanukah and Merry Christmas.

Posted on Sun, Dec. 17, 2006

High prices don't translate into better healthcare in South Florida
In the still murky world of healthcare information, high costs of healthcare are not at all linked to high quality care in South Florida.

With studies showing that South Florida has among the highest healthcare costs in the country, consumers might assume local hospitals' performance on quality standards would be among the tops in the country.

Think again.

After a thorough examination of quality data made public by Medicare, Harvard researchers have discovered South Florida's performance is among the worst in the country in two out of three key categories.

Their findings reveal what many experts now see as a growing amount of health information becomes available: The relationships among costs, the quality of treatment and ultimate outcome is murky at best. That means measuring proper treatments may not have much to do with costs at the moment -- or even whether the patient lives longer.

Insurers and the federal government want the consumers to have more health information to make better choices and to pay providers according to their performances. In theory, it's great. In reality, providers fear it it may be something else.

''Though I am supporting transparency in healthcare pricing and the patients (sic) right to receive high-quality care, I am concerned that insurers may just focus on cheaper and not necessarily better,'' wrote North Miami Beach doctor Bernd Wollschlaeger in a letter to colleagues after a recent Miami Herald report on healthcare pricing.

In fact, Wollschlaeger believes one problem may be that there is not enough information. One major example: South Florida doctors usually don't know whether the patient received the proper test at the hospital, meaning they frequently order the same test again.

Unnecessary repetition of services and tests, frequently caused by excessive trips to specialists, is one reason why researchers of the Dartmouth Medical School have found that per capita healthcare costs in Miami are almost twice what they are in Minneapolis, another similar-size city they studied.

Contrast that with the findings of four researchers from Harvard's School of Public Health who studied the 40 largest hospital markets in the United States for the basic Medicare quality measures, such as giving aspirin to a patient after a heart attack.


In two of the three main categories -- treatment for heart attack and for pneumonia -- the Miami region ranked in the bottom five, the researchers wrote in their article, published in the New England Journal of Medicine. For the third category, congestive heart failure, it didn't do much better, finishing 29th out of 40.

''These are very simple but really important things to perform,'' says Ashish K. Jha, the lead Harvard researcher. ``Aspirins, beta-blockers -- things that can cost pennies but can be crucial.''

Meanwhile, Florida's healthcare dollars are being spent much more frequently, according to a Dartmouth study released in May. During the last six months of life, the average Medicare recipient spends twice as many days in intensive care and has twice as many doctor visits as his counterpart in Utah.

Within Florida, a patient in Miami spends twice as much time in intensive care and sees twice as many specialists in those last six months than does a patient in Fort Myers.

Alan Sager, a Boston University health professor, thinks these big-picture spending contrasts are what the industry should be looking at, not insurers revealing provider prices.

After The Miami Herald ran a report about insurers making public health cost and pricing information as a prelude to steering consumers toward more efficient providers, Sager sent an e-mail to The Miami Herald: ``Shopping by price won't save serious money because it addresses the wrong question. The big question is not, where's the cheapest place to get the operation, MRI or primary care visit? The big question is, do I need the operation, MRI or visit?''


Sager, like many other experts, believes about half of all healthcare expenses are unnecessary, and if needless work could be curtailed, then America could provide healthcare for everyone.

The nonprofit National Committee for Quality Assurance, which has been measuring health plan performance on various measures for a decade, is now starting to look into these broader ''efficiency'' questions.

NCQA is starting a pilot that will go beyond measuring health plans' quality -- making sure diabetics get blood-sugar tests -- to look at cost, and not just for specific measures.

''We're going to focus on the total cost of healthcare,'' says NCQA Vice President Joachim Roski. ``It could mean you spend money in some areas, but not in others. You might spend more on preventive visits or more on pharmacy but spend less on hospitalizations.''

Adjusting for risk factors such as age and health condition, NCQA plans to release its first efficiency data in September 2007. ''The ultimate question is, do organizations in Miami get the same level of quality with the same level of cost?'' says Roski. ``And if not, why not?''

Brian Klepper, head of the Center for Practical Health Reform, agrees that many healthcare dollars are spent on unnecessary care. He thinks a primary cause may be the present fee-for-service model, in which the more doctors do, the more they get paid. He points out that some years ago, when the state lowered provider payments for workers' compensation treatment, the doctors responded by finding more treatments to do on each patient.

Klepper thinks that payment model has to be changed -- so that doctors get sums for a total treatment of an illness, not for each incremental step -- but he also believes that there must be greater transparency in the system.

Klepper and Wollschlaeger, the doctor who is a delegate to the American Medical Association, believe one good way to provide transparency and cut unnecessary costs is to form regional health information systems.

That way, doctors can see online what other providers have already done for a patient, particularly important in South Florida, which has 40 percent more specialists than does Minneapolis -- a fact that Dartmouth researchers believe causes many duplicative services here.

With providers sharing patient information online, that means someone like Wollschlaeger can see that a patient just released from the hospital ''has already had the pneumonia vaccination shot, so I don't have to order another one for $85,'' says Wollschlaeger.

Discussions about forming a network in South Florida, however, are just getting under way. In the meantime, many are still struggling to comprehend the meaning of the data now available.

A study published Wednesday in the Journal of the American Medical Association found that performance measures reported by Medicare for 3,657 hospitals ''are not tightly linked to patient outcomes,'' meaning that hospitals that are doing a good job of giving, say, the beta-blocker at the right moment are not necessarily showing a good job in lowering mortality rates.

''These findings should not undermine current efforts to improve healthcare quality through measurement and reporting,'' wrote the researchers, headed by Rachel M. Werner. ``However, attention should be focused on finding measures of healthcare quality that are more tightly linked to patient outcomes. Only then will performance measurement live up to expectations for improving healthcare quality.''

December 17, 2006
Economic View
The More You Pay, the Better the Care? Think Twice

EXPERTS have long been puzzled by the existence of large regional disparities in medical care in the United States. Even for diseases for which the appropriate treatment is widely accepted, doctors across the country take vastly different approaches, often leading to enormous expense without making any appreciable improvement in their patients’ health.

Consider heart attacks. Prescribing beta blockers immediately after a heart attack is a well-established, cheap and efficient treatment. In Iowa, nearly 80 percent of victims in 2000 received the drugs within 24 hours of a heart attack. In Alabama or Georgia, by contrast, fewer than 6 out of 10 patients received the drugs.

“What makes the lag in beta-blocker adoption puzzling is that the clinical benefits have been understood for years,” wrote Jonathan S. Skinner and Douglas O. Staiger, economists at Dartmouth, in a recent study about these regional patterns.

Congress has decided that some treatment decisions may be best taken out of doctors’ hands. In one of their last acts this year before adjourning, lawmakers passed a bill entitling doctors to a bonus from Medicare if they report data on the quality of their care, using criteria like whether they prescribe aspirin or beta blockers to heart attack victims. In the future, this data would permit Medicare to reward doctors who followed government guidelines.

Many doctors criticized the decision, saying it would impose a form of medicine by cookbook that could endanger patients. Still, some experts contend that this form of accountability is a necessary step to deal with inefficiencies that riddle the health care system and fuel much unnecessary spending on care.

Several new studies suggest that there is no relationship between the amount spent on treating a patient and the quality and outcome of the care.

Consider chronically ill elderly patients in the last two years of their lives. According to a comparison of hospitals across the country done by researchers at Dartmouth, if the patients die in a hospital in New York State, the average cost of those two years would be $38,369. In Florida, by contrast, it would be $29,604, while in Iowa it would be only $23,746.

To be sure, much spending on health care provides enormous benefits. A study published this year by Mr. Skinner, Mr. Staiger and Dr. Elliott S. Fisher of Dartmouth Medical School found that Medicare spending on hospital care for heart attack victims surged two-thirds from 1986 to 1996, after accounting for inflation. But the percentage of victims who were alive a year after their attacks also increased, though by just 10 percentage points, to roughly 68 percent.

The relationship — rising costs bringing increased benefits — has broken down recently. From 1996 to 2002, Medicare spending on treatments for heart attack victims increased about 14 percent, after inflation. But there was virtually no improvement in survival rates.

There is mounting evidence that the zeal to treat and spend may actually hurt patients. The study by Mr. Skinner, Mr. Staiger and Dr. Fisher found that hospitals in regions where spending grew fastest from 1986 to 2002 had some of the worst practices, in terms of providing tried-and-true therapies, and recorded the smallest gains in survival rates.

Treatment of heart disease underscores the deeply idiosyncratic nature of many choices made by America’s doctors and hospitals. Coupled with a fee-for-service system that encourages aggressive treatment, these choices stimulate health spending that provides little benefit to patients. “A lot of the innovation and spending growth are going into gray areas that are not helping people that much,” Mr. Skinner said.

But perhaps the most puzzling inefficiency in how doctors treat heart disease is not the spending on fancy yet ineffective therapies. It’s the lack of spending on treatments that have been known to work for years, like beta blockers.

“The biggest failure of the American health care system is not that we overuse stuff but that we underuse stuff,” said David Cutler, an economist at Harvard. Consider aspirin. It helps prevent formation of blood clots, and its widespread use has probably been the cheapest breakthrough in the history of heart disease treatment.

A study five years ago by Dr. Mark McClellan, who was to become the commissioner of the Food and Drug Administration, and Dr. Paul A. Heidenreich of the Veterans Affairs Palo Alto Health Care System in California, estimated that growing aspirin use explained more than a third of the decrease in the death rates of heart attack victims from 1975 to 1995.

Still, a Duke University study of about 32,000 patients with coronary artery disease who were treated from 1995 to 2002 found that only 83 percent took aspirin. And only 71 percent did so consistently.

The financial incentives in the health care system are part of the problem, experts say. These incentives encourage hospitals and clinics to provide more services, hire more specialists and install more devices. They shuttle patients from one specialist to the other — providing more-scattered care. All too often, when the patient leaves the hospital, nobody among the crowd of doctors takes responsibility for prescribing the beta-blockers. “The system rewards throughput and higher-margin services,” Dr. Fisher said. “This leads us inadvertently to waste and inadvertently to harm.”

He argued that hospitals and doctors must gather into bigger units that coordinate care smoothly — sharing medical records and responsibility for a patient’s overall health. They should provide information about treatments and outcomes. And, he said, Medicare must start paying for results, measured in terms of lives improved and extended and of value for the money.

Congress has taken a step in this direction. But changing entrenched practices is not easy.

MR. SKINNER and Mr. Staiger found an odd pattern in the regional propensities of doctors to prescribe beta blockers: it closely matched the propensities of farmers to embrace hybrid corn early in the 20th century.

Hybridization spread through Iowa’s cornfields as early as the mid-1930s. By contrast, in Alabama and Georgia it didn’t take hold until the late 1940s. In other words, the lag in the prescription of beta blockers is not simply a problem of the health care system. It also reflects regional attitudes about the adoption of new technologies, the study concluded. That problem could take generations to solve.

Sunday, December 03, 2006

Healthcare Pricing


Dear Friends and Colleagues:
Attached an article from todays Miami Herald discussing the issue of healthcare pricing. According to the reporter many health insurers and governments are already charging ahead to make information about hospital and doctor quality performance available to the public, but many believe the biggest push -- and the biggest battleground -- will be the revelation of healthcare pricing. It sis true that at the moment, healthcare prices are so convoluted that even experts struggle to make sense of them.At some point, however, this abstract knowledge will be used for specific economic ends. Insurers are already calculating the costs of care and comparing it with the quality of a provider's care. Some even start steering customers towards doctors who provide "cheaper"care by rewarding customers financially.
Even though I am supporting transparency in healthcare pricing and the patients right to receive high-quality care, I am concerned that insurers may just focus on cheaper and not necessarily better care.
This in the end will reward those docs that lowball others and comply with checklists and protocols to maintain their competitive edge.
The patients choice in physicians selection will thereby severely hampered.

Posted on Sun, Dec. 03, 2006

Lifting veil on healthcare costs
Exposing the super-secret lists of healthcare pricing could lead to huge changes -- and give consumers a real understanding of the true costs of their treatment.

At Broward General or Mercy Hospital, a coronary bypass operation can be expected to cost $30,909 to $43,407. At Baptist Hospital, the cost is likely to be far more -- $43,070 to $58,271, according the health insurer Cigna.

For women ages 40-64 insured by Aetna, gynecologist Moises Lichtinger in Fort Lauderdale charges $86.93 for a comprehensive exam. In Miami Beach, gynecologist Pedro J. Brasac charges $106.99.

For the first time, insurers are starting to reveal some of the most deeply held secrets of healthcare -- what things really cost. Those revelations may ultimately change what providers charge -- and how much consumers pay.

''We're at the leading edge of a huge change,'' says Brian Klepper of the Center for Practical Health Reform.

Many health insurers and governments are already charging ahead to make information about hospital and doctor quality performance available to the public, but many believe the biggest push -- and the biggest battleground -- will be the revelation of healthcare pricing.

At the moment, healthcare prices are so convoluted that even experts struggle to make sense of them.

The list of prices for Baptist Hospital, for example, is contained in a foot-thick document called a chargemaster. No outsider is allowed to see it. What's more, virtually no one pays those prices. Medicare, Medicaid and consumers with private health plans all pay negotiated rates that may be only a third of the official prices. That means only those without insurance get hit with a full-price bill.

Uwe Reinhardt, the widely respected healthcare economist at Princeton, compares present hospital pricing to entering a department store blindfolded and shopping for a ``clothes benefit program.''

''Only months after a shopping trip would the employee receive . . . a statement explaining how much the employee had to pay for whatever he or she had stuffed, blindfolded, into the shopping cart,'' wrote Reinhardt in the January/February issue of Health Affairs.

That meant the department store/hospital had finally presented its charges, and the insurer then decided what was a ''reasonable'' rate for those charges that it deemed appropriate. Finally, the customer is told to pay a certain percentage of that mysterious figure.

At present, persons with insurance generally don't care about this mysterious pricing. For that coronary by-pass surgery mentioned above, for example, the Cigna patient in one typical high-deductible plan would have an out-of-pocket expense of $3,000 at each facility, regardless of the cost.

Knowing prices now ''helps provide clarity on how much things cost,'' says Joe Mondy, a Cigna spokesman.

''The more people understand the cost of healthcare, the better off we will be,'' says Charles Cutler, national medical director for Aetna.

At some point, however, this abstract knowledge will be used for specific economic ends. Insurers are already calculating the costs of care and comparing it with the quality of a provider's care. ''That's going to start a huge shift,'' says Klepper of the Health Reform group.

The Bush administration in Washington and private insurers believe that hospitals and doctors who do the best in this quality-cost scenario should be rewarded with higher payments -- the so-called ``pay for performance.''

The flip side is steering consumers to those providers who provide quality efficiently. Cigna is already starting to do that, with its Cigna Care Network, made up of doctors who score well for quality and cost-efficiency. Starting in January in 58 markets (including South Florida), members who use the Cigna Care doctors will be rewarded by saving $10 to $30 per office visit.

Doctor quality by itself is a complex issue -- as The Miami Herald discussed in a report last Sunday -- but efficiency may be even more complicated.

Spokesmen for programs like Aetna's Aexcel, UnitedHealthcare's Premium Physicians and Cigna's Care Network insist that efficiency ratings are given only to those physicians who have already shown quality performance, but none of them go into detail about what makes for efficiency.

Theoretically, efficiency could mean keeping patients out of expensive emergency rooms or not requesting unnecessary tests and procedures, but in practice, doctors are suspicious that it might mean simple cost-cutting.

''You have to look very carefully at those efficiency numbers,'' says Nancy Nielsen, a Buffalo internist who's head of the American Medical Association's House of Delegates. ``Some are only about costs. That's where it gets tricky. That's where the biggest fights and negotiations are.''

The AMA is so concerned about insurers forming networks using efficiency measurements that its delegates, meeting in Las Vegas in November, passed a resolution seeking laws to prohibit insurers from creating networks ''based solely on economic criteria.'' Last week, the national organization of doctors joined its first lawsuit on the issue, against Regence BlueShield in Washington state. Insurers insist it won't be ''solely'' on costs, but they say something must be done about cost disparities, many of which have nothing to do with quality of care.

In South Florida, Aetna reports, the negotiated rates -- the real rates insurers pay -- vary widely right now. Knee arthroscopy in an orthopedist's office can cost from $1,922 to $4,000. For a hysteroscopy (the insertion of a small telescope to study a uterus) at an OB/GYN office, the price ranges from $1,200 to $4,756. For a heart catheterization, at a cardiology office, the price ranges from $600 to $2,500.

Of course, top doctors charging more might explain those variations, but what explains differences in radiology tests, such as a magnetic resonance imaging?

''These are commodities,'' says Mondy of Cigna. ''An MRI is an MRI is an MRI.'' But Cigna's studies show that their costs vary by an average of 30 percent.

An MRI without contrast agent at the Cleveland Clinic in Weston costs $400 in Cigna's negotiated fees. Broward General's price is $450. Hollywood Medical Center charges $660.

Some insurers are more focused on advising consumers about estimates for procedures -- without showing the differences between facilities. Blue Cross Blue Shield of Florida, for example, tells its members that coronary bypass surgery for a 45- to 64-year-old in Miami-Dade will cost $55,562 to $80,257 in network, $124,260 to $179,488 out of network, for everything including hospital, surgeon and related costs. In Broward, it would be a couple of thousand less.

A Florida government website also offers pricing information, but it is based on hospitals' gross charges, which persons rarely pay. Still, an uninsured person who is likely to be charged full fare can learn from the website ( that for coronary bypass surgery at Baptist Hospital is $135,573, well below Broward General's $140,227 and Mercy's $154,261.

But the data of Cigna and other insurers reveal that Baptist, which has a near monopoly on the affluent area of southern Miami-Dade, is able to negotiate a much better deal for itself than the others can.

When it comes to real prices -- the negotiated rates -- Cigna pays Baptist about 35 percent of its full charges (around $47,500), while Broward General gets about 26 percent ($37,000) and Mercy receives about 24 percent ($37,000). And, as Cigna members are told on the insurer's website, the three hospitals are all ranked at the top level of three stars for the quality of patients' outcomes.

Eric Shatanof, vice president of Baptist Health South Florida, says that the price of one procedure, such as coronary bypass, doesn't mean that the Baptist hospitals (which include Doctors, South Miami and Homestead) are more expensive in all charges. ``Pricing is pretty complex. We could be more expensive on heart surgery and less expensive on something else.''

However, executives of four other insurers have told The Miami Herald that Baptist is consistently and considerably higher in its pricing. The executives don't want their names used because they don't want to anger the hospital system, which the insurers regard as crucial to maintaining customer satisfaction.

Shatanof acknowledges that ''our cost structure is quite a bit higher than our competitors. We have a higher clinical staffing ratio. We have higher investments, like the remote [intensive care unit] monitoring. So it's not necessarily apples to apples comparisons'' on quality and price.

But if insurers go to tier systems, in which consumers would have to pay more to go to higher-priced hospitals, ''it could change the mix,'' said Shatanof. ``Then you have to change the pricing.''

Prescription Drug Abuse

Dear Friends and Colleagues:

Attached an article from today’s Sun Sentinel highlighting the rampant use of prescription painkillers in Florida.
In the absence of any statewide prescription drug tracking system doctors and pharmacists often have to rely on their best judgment to fill or refill narcotics.
The article states that –“as of June, 32 states had adopted prescription-tracking programs to curb problems such as those in Florida, the most populous state without such a law.”
Furthermore the article correctly reports that – “despite the known dangers, Florida lacks a system for tracking prescription drugs. That, according to law enforcement officials, makes it a haven for addicts and "pill mills," where doctors churn out prescriptions without thoroughly examining patients.”
The Florida Medical Association in cooperation with the State Attorneys Office has released a comprehensive guide for physicians on how to diagnose, manage and treat patients with acute and chronic pain.
I want to EMPHASIZE that the MAJORITY of physician are prescribing narcotic pain medications in a responsible and professional manner!!!!
Nevertheless,we need to continue taking a proactive stand against unethical and unscrupulous “physicians”, who churn out prescriptions for their own financial gain. Those so-called “Pain Management “clinics are sprouting like mushrooms all over the State often owned and operated by doctors, who have little or no special training in pain management. Contrary to common belief these “doctors” are not being duped by patients to write prescriptions or trying to help patient suffering from pain. These “doctors” abuse their prescribing privileges to issue THOUSANDS or highly addictive opioids for ANYONE who pays. These “doctors” are driven by profits and not by the motivation to help patients. We need to protect our profession and point out those drug dealers in white coats and at the same time support legislation creating a statewide prescription pain medication-monitoring program.

Bernd Wollschlaeger,MD,FAAFP

Alarm in South Florida over prescription drug trade

Deaths skyrocket as dealers and addicts flock to S. Florida.

By Vanessa Blum
South Florida Sun-Sentinel

December 3, 2006

Out-of-state drug dealers and addicts are traveling long distances to visit Florida pain clinics, targeting the state because its lax oversight of prescription drugs makes scoring pills easier.

The unwanted tourism alarms state officials who have watched deaths from prescription pain medication skyrocket in recent years. In 2005, such prescription drugs as hydrocodone, methadone and oxycodone contributed to more overdose deaths than all other narcotics combined, according to Florida medical examiners.

Despite the known dangers, Florida lacks a system for tracking prescription drugs. That, according to law enforcement officials, makes it a haven for addicts and "pill mills," where doctors churn out prescriptions without thoroughly examining patients.

The problem was noted in a national drug threat assessment released Nov. 15 by the U.S.Department of Justice. The report outlined the "drug run" phenomenon in South Florida, saying residents of states with prescription monitoring "have in some cases turned to traveling to nearby states ... to illegally obtain pharmaceuticals."

That was the case for more than two dozen people from Kentucky who drove 1,000 miles each way to see doctors in Palm Beach County and Fort Lauderdale. They came by the van-load throughout 2005 and early 2006, returning with doses of OxyContin, Endocet, Percocet, Methadose -- drugs that were more difficult to get at home, according to federal prosecutors.

Eight people involved in the trips pleaded guilty to drug-trafficking charges in Palm Beach federal court, and several more are being tried in Kentucky state courts for alleged drug-related crimes.

The Fort Lauderdale medical office that supplied some of their prescriptions also is being investigated.

Drugs prescribed by Florida doctors caused the deaths of five people in Kentucky, according to prosecutors. One man died from a fatal overdose during the 18-hour drive home.

"We've seen people coming from all over the Southeast United States," said Rick Zenuch, an agent with the Florida Department of Law Enforcement who monitors drug-related trends. "The fact is, illicit drug traffickers don't see state lines as any boundary."

As of June, 32 states had adopted prescription-tracking programs to curb problems such as those in Florida, the most populous state without such a law.

While each system follows slightly different rules, their primary goal is to identify forged prescriptions and to expose so-called doctor shoppers who visit multiple physicians and pharmacies seeking drugs.

The programs generally require doctors to submit information on prescriptions to a centralized database. When an order is filled, the pharmacist also sends an electronic record.

If a doctor or pharmacist were to notice anything amiss in a patient's file, they could contact law enforcement or state health officers.

Kentucky's system is a model for other jurisdictions. Its effectiveness drove illicit drug seekers to surrounding states like Indiana, Ohio, Virginia and West Virginia. Each, in turn, created tracking programs, said Danna Droz, a former administrator of Kentucky's system.

In 2004, Florida's Legislature seemed poised to jump on the bandwagon. OxyContin manufacturer Purdue Pharma agreed to pay the state $2 million to cover start-up costs. But key legislators blocked a vote on the proposal citing its annual $2.8 million price tag and patient privacy considerations.

Dr. Rafael Miguel, a professor of pain medicine at the University of South Florida, called the inaction "infuriating and depressing."

"You have to provide Florida doctors with tools so they can safely prescribe these medications and know they're in the right hands," Miguel said. "Right now doctors are being made unwilling and unknowing participants in the drug trade."

A similar proposal languished and died this year as the legislature focused on other issues. Drug enforcers like Bill Janes, director of the Florida Office of Drug Control, vow to continue their push. Janes said working with lawmakers to pass a prescription-tracking program is his top priority for the new legislative session.

Soon legislators may have no choice. Under a federal law passed in 2006, states that do not implement prescription-tracking within three years will take a backseat for federal funding of drug-related programs.

A prescription tracking system is not a cure-all, Janes said, but could help prevent doctors and pharmacists from unwittingly aiding addicts and drug dealers. Moreover, if criminal activity were suspected, police could get evidence much more quickly.

"It would be a first step," Janes said. "Certainly the opportunity to obtain illegal drugs is much higher if you don't have this."

Maureen Barrett of Fort Lauderdale will support those efforts. She lost her son to a painkiller overdose in 2002 and thinks prescription monitoring might have saved his life.

Drew Parkinson, a student at Florida Atlantic University, received prescriptions for 1,455 pills in 57 days. He died at 25, two days after picking up his final doses.

"Somewhere along the line, a red flag should have come up so they wouldn't have kept giving him the pills," Barrett said.

Privacy concerns cited by opponents are overblown, she added.

"If you go to CVS or Walgreens they have a complete list of all the medicine you've gotten," Barrett said. "We have laws in place to make sure that information is not disseminated."

Dr. Robert Yezierski, director of University of Florida's Comprehensive Center for Pain Research, isn't convinced. He said prescription-tracking is "a good idea in theory," but people who want to abuse the system will find a way.

"What we don't want to do is deny treatment to people who legitimately need pain medication," Yezierski said.

Pain relievers such as methadone and oxycodone -- both chemically altered opioids similar to heroin -- are among the most commonly abused prescription drugs. According to a report published by the Florida Department of Law Enforcement, methadone caused 620 Florida deaths in 2005 -- either alone or in combination with other drugs. The report listed oxycodone as the cause of 340 fatal overdoses.

Used at recommended doses, oxycodone is a powerful treatment for pain and is often prescribed to cancer patients. The drug also is highly addictive and dangerous when taken in large quantities or mixed with alcohol.

Oxycodone tablets sell on the street for about $1 per milligram -- almost 10 times what they cost at a pharmacy.

The Kentucky group frequented clinics in Broward and Palm Beach counties. Some pills went to feed their own addictions, prosecutors and law enforcement say. Others they sold on the street or to friends and neighbors in their small towns near Lexington.

Kentucky law enforcement alerted the Drug Enforcement Administration after a number of overdoses were linked to Florida prescriptions. The individuals charged in federal court range in age from 21 to 64 and face sentences of about four to nine years.

So far, no physicians have been charged in the connection with the case.

In May, federal agents raided the offices of a Fort Lauderdale pain clinic where some Kentucky travelers received prescriptions.

Kentucky grandmother Jewel Padgett, 64, was among those prescribed pills by physicians at the AMMA Pain Care Center in Fort Lauderdale, according to her attorney.

She pleaded guilty to four felonies connected to her Florida trips, including conspiracy to distribute controlled substances and traveling across state lines to promote drug trafficking.

Government lawyers contend Padgett organized and paid for many of the trips from Kentucky in exchange for a portion of the others' pills, earning roughly $30,000.

Padgett's son said his mother went to Florida because she couldn't find a doctor in Kentucky willing to treat neck and back pain caused by a 1998 car accident.

"They wouldn't give her medication she needed," said Don Padgett. "They're scared up here. They got them so restricted."

Fort Lauderdale attorney Theresa Van Vliet, who represents AMMA, said her client supports prescription monitoring and hired a Tallahassee lobbyist earlier this year to push the measure.

"They think it's a good thing," Van Vliet said of her clients. "Pain management is a very new medical field and it is one that clearly can be manipulated."

Van Vliet declined to discuss the Kentucky cases, citing medical privacy laws.

She said AMMA physicians are told to verify medical reports before prescribing pain medication and discouraged from treating out-of-state patients. "It's not foolproof," Van Vliet said, "but nothing is foolproof."

Vanessa Blum can be reached at or 954-356-4605.