Thursday, December 24, 2009

Senator Reid makes the Doctors Pay for Medicare under Senate Bill 3590

The politicians are claiming that Senator Reid's bill will save the country money according to the latest CBO report. Physicians were scheduled to have a 21% pay cut caring for Medicare patients as of January 1, 2010. However, under Section 3101, this bill provides for .5% increase for physicians in 2010 but assumes no further increases or change to the Medicare Sustainable Growth Rate formula which is used to compute physician payment rates. It is known to be a flawed formula requiring an act of Congress to "fix" each year. Politicians have always provided some nominal increase in physician payments, even if it has not kept pace with inflation. According to the Alliance of Specialty Medicine, "If the SGR formula is not fixed, physicians will receive negative updates of approximately five percent each year from 2006 until 2013 and rates will not return to their 2002 level until well after 2013. In other words, physicians will receive less reimbursement in 2013 than they did in 2002 for the exact same procedure, regardless of inflation and increases in practice costs." This unrealistically assumes doctors will bear the cost burden for the Medicare population. More likely physicians will have to stop Medicare participation (stop caring for Medicare patients) under these conditions. It seems disingenuous to claim "savings," when not all the costs have been realistically accounted for in this bill. This bill will surely go over the CBO estimates if real world historical political behavior of annual "fixes" are assumed as opposed to the static assumptions of the CBO.

Tuesday, December 22, 2009

On Sunday, under Cloak of Darkness, in the Wee Hours of the Night and in a Snow Storm, the Senate Voted on Health Reform

I am reminded of a phrase my grandmother used to say, “Fra dire e fare, ch’é un mare” - Between saying and doing there is an ocean in between. For all the talk about openness and transparency, it seems things could not be more the opposite given the government was shut down yesterday (Monday) due to the snow. Most all of what has been negotiated has been behind closed doors, with only the ruling party invited to participate. All the rhetoric about “If anyone out there has any good ideas, we want to hear them,” appears to be just hot air. Only one party actually got to bring any of their ideas to the floor for a vote. Despite the fact that Rasmussen has polled the public on healthcare reform and 57% do not want the government to do anything at this point, Congress seems determined to ignore the will of the people. Many have called their elected representatives to find no one answers the phone, email is answered by form letter that usually is not even relevant to what the person wrote. Local offices of elected officials are not taking calls from what my colleagues are reporting to me. Americans are frustrated because their voices are being flatly ignored.

It seems our elected officials do not realize healthcare is not like any other issue. People go back to work for healthcare coverage. The definition of a good job is that it has good benefits, especially health benefits. For most people this is a giant security blanket. They will take a lesser paying job in order to get coverage.

What is most disturbing is the fact that Congress fails to appreciate that the uninsured are not a static group of people. According to a 2004 CBO report, “About 30 percent of Americans under age 65 who become uninsured in a given year remain so for more than 12 months, while nearly half obtain coverage within four months.” Given that most are only transiently uninsured, one must ask. “What is the purpose of remaking 1/6 of the economy and financing it with high taxes to build a system that is not scheduled for implementation for four years, for people who will not likely need coverage by then?”

Politicians, beware passing any of the currently proposed healthcare bills. Failure to recognize that this unlike any other matter before Congress, will surely mean peril in next fall’s election and beyond.

Friday, December 11, 2009

Part II: Let's just import our drugs!

Even legitimate importation of drugs by Big Pharma from their overseas manufacturing facilities has caused problems. Recall the heparin manufactured in China by Baxter Healthcare, which was contaminated by over-sulfonated chondroitin sulfate, a cheaper substance that somewhat mimics heparin’s anticoagulant activity. This was deliberate sabotage by the chemists and managers working in the Chinese plant at the expense of the public.

The FDA’s answer to counterfeit drugs and devices has been to open offices in Beijing, Guangzhou and Shanghai, other locations including India, the Middle East, Latin America and Europe. FDA employees are planning on inspecting products and developing liaisons with Chinese officials and groups. While developing liaisons with exporting governments is good, it is important to understand how ineffective it is for the FDA to go it alone on inspecting tours. According to a Reuter’s article that ran in November 2007:


"U.S. regulators inspect few foreign makers of pharmaceutical ingredients and have no accurate count of how many companies supply the American market, a watchdog arm of Congress said on Thursday. Data from the Food and Drug Administration suggest the agency inspects only 7 percent of foreign drugmakers each year, the Government Accountability Office (GAO) told lawmakers. The FDA lacks an accurate list of foreign sites subject to inspection because officials rely on conflicting databases, the GAO said. The agency cannot say how many of the overseas sites have never been visited, the GAO added.

Investigators uncovered similar problems when they reviewed the FDA’s oversight of foreign drug manufacturers in 1998, said Marcia Crosse, the GAO’s director of health-care issues. “Until FDA responds to systemic weaknesses in the management of this important program, it cannot provide the needed assurance that the drug supply reaching our citizens is appropriately scrutinized and safe,” Crosse told the House of Representatives Energy and Commerce subcommittee on oversight and investigations.

Foreign-made medicines are common in Americans’ medicine cabinets. More than 80 percent of active pharmaceutical ingredients now come from other countries, with more than half from India and China, lawmakers said.

The FDA is required to inspect U.S. drug plants every two years, but there is no set timeline for foreign facilities that supply drugs or their ingredients to the United States. One agency database lists more than 3,000 foreign sites registered to market drugs in the United States in fiscal 2007, while another put the number as high as 6,800. At the current pace, it would take the FDA 13 years to inspect each of the 3,000-plus firms once, the GAO said.

…William Hubbard, a former FDA associate commissioner, said the nation was vulnerable. “My concern is it’s only a matter of time if we don’t fix this,” Hubbard said.

FDA Commissioner Andrew von Eschenbach said the agency was “taking an aggressive approach” to adapt to the rapid globalization of drug manufacturing. Initial steps include improving computer systems and deploying FDA personnel to foreign locations for long-term assignments. “We agree we must revamp our entire strategy ... we are doing this,” von Eschenbach told the committee.

…Lawmakers will pursue legislation to give the FDA more funding for inspections and computer upgrades, said Michigan Democratic Rep. Bart Stupak, the subcommittee chairman. “I believe we have an opportunity to fix FDA’s foreign drug program before Americans are sickened or killed,” he said."


The bottom line is that the U.S. government does not have any money to waste. While we may set up offices in countries or cities where we have considerable business or there are an abundance of manufacturing facilities to facilitate trade, it is impractical to open offices everywhere. We do need to split up this task with our fellow First World countries that are also likely to be importing drugs from the same manufacturers.

We cannot waste our government’s resources putting offices in every country that might wish to export drugs to us. If foreign facilities have not been inspected and products randomly tested by us or our First World trading partners, then their products should be quarantined on entry until random samples from each shipment are tested either by the FDA or a government-authorized independent laboratory, at the expense of the exporter.

When pharmaceutical companies want to import medicines from their overseas facilities other than ones in another First World country, those facilities should be required to employ First World expats as the general managers, senior staff and QA personnel. This is not being elitist. The major problem in the Third World is the state of mind, rather than a lack of money; what is and is not acceptable there is often considerably different than in the First World. Consider Europe after the Second World War. Despite the devastation in a city like Milan, a good deal of the destruction had been repaired within seven years and commerce was functioning normally. Yet seven years after going into Iraq and hundreds of billions of dollars later, we have yet to see what resembles a First World country. We won both wars, but the success of the people in creating or recreating a First World country is vastly different. Italy was already a First World country. In the First World, people have a different set of standards and expectations for themselves and how they do business, including how they provide goods and services. In the Third World, particularly in the former communist countries I have worked in, the mentality tends to resemble a form of Ferengi capitalism. A Third World country generally does not move to a First World country in one generation. It usually takes two generations of education and seeing First World business practices for a country to move up into the First World. Until then, expat management is essential.

While we should be clear about the process and pleasant to those exporters who wish to comply, we should not let any country twist our arm by bringing politics into the situation. We should not tolerate the importation of drugs from overseas manufacturers with lower manufacturing standards than our own. This is a quality and safety issue. The FDA has a responsibility first and foremost to protect the American people.

This post is an excerpt from Healthcare Solved - Real Answers, No Politics.

Thursday, December 10, 2009

Part 1: Let’s just import what we need!

This is a common attitude among the public and politicians. The American Association of Retired Persons endorses it and is organizing a grassroots campaign to support the idea. It saves all the work in trying to actually fix the problem—or does it?

It is common for retirees in Sun City, AZ, to carpool down to Mexico for their medications every month or two to save money. In my hometown of Youngstown, OH, day-trips by bus are organized to take Americans to Canada for their prescription drugs. The Internet has a proliferation of advertisements and spam e-mails for cheap prescription drugs. Why should Americans have to pay top dollar? (The answer is we shouldn’t—but don’t stop reading here.)

While it might be all right to go to another First World country to purchase medication, it is not all right to run off to the Second or Third World to do so. Before anyone thinks this unfair, consider that one of the top issues each year at the World Health Organization’s Annual Assembly is the problem of counterfeit products, whether fake, “watered” down or substituted, and the problem is increasing.

"..Increasingly easy access to sophisticated technologies such as those for printing and manufacturing, have made it more difficult for governments and other concerned parties to combat counterfeiters of medical products effectively…the extent of counterfeiting is impossible to quantify…Counterfeiting affects all medical products: from medicines and pharmaceutical ingredients to medical devices and diagnostics…Counterfeit products have been detected in most of WHO’s Member States and in all its regions. Cases have involved widely used medicines such as atorvastatin [Lipitor] and paracetamol [Tylenol], limited use medicines such as growth hormone, paclitaxal [Taxol], and filgrastim [Neupogen], erectile dysfunction medicines and medical devices such as contact lenses, condoms, surgical mesh and diagnostic test strips used by diabetic patients to monitor their blood glucose concentrations. Both expensive products and cheap ones, generic and branded products are being counterfeited with the result that they appear in community pharmacies and hospitals, as well as other less regulated settings.

Although organized crime and individuals acting alone have been associated with the manufacture and/or trade in, counterfeit medical products, in most cases the counterfeit products appear to have been internationally traded between previously unconnected groups or individuals. This fact puts an equal responsibility on importing and exporting countries.

Many factors of varying importance between Member states contribute to creating an environment where the manufacture of, and trade in, counterfeit medical products can thrive:

• Governments’ unwillingness to recognize the existence or gravity of the problem

• Inadequate legal framework and penalties

• Weak administration and coordination, with measures not focused on fighting counterfeiting

• Ineffective control of manufacturing, import and distribution of medical products

• Ineffective collaboration among bodies and institutions, such as health authorities, police, customs and the judiciary, involved in regulation, control, investigation and prosecution

• Ineffective collaboration and exchange of information between the public and private sector

• Insufficient collaboration and exchange of information

Besides the ubiquitous corruption, several other socioeconomic factors, many of which are specific to some countries, or particular areas inside a country, undermine efforts against counterfeiting:

• National drug policies that prioritize economic over public health aspects of medicine manufacturing, with the result that exporting takes priority over compliance with good manufacturing practices.

• Extreme fragmentation of distribution channels involving an unnecessarily large number of transactions, thereby increasing the opportunities for counterfeiters to infiltrate the normal distribution system

• Existence of “extraterritorial” trade zones which largely escape from regulatory and enforcement oversight and goods and their accompanying documentation can be manipulated

• Inadequate access to health services and reliable pharmaceutical supply channels that creates opportunities for “informal operators” who establish “informal supply systems” purportedly to meet populations’ real needs

• Absence of or insufficient social security coverage in countries that do not regulate prices; the resulting search by patients for better prices often leads to fierce competition among vendors and opens opportunities for counterfeiters who can offer unbeatable prices

• Illiteracy and poverty, which puts patients at a particular disadvantage

• Unregulated Internet trade, where unscrupulous sellers can hide their identity and the true origin of traded medical products

• Third-party manufacturing, which, if not properly and carefully supervised, may lead to the unauthorized use of manufacturing techniques and packaging materials." [ Counterfeit medical products. Report by the Secretariat – WHO. 61st World Health Assembly. Provisional agenda item 11.13, April 7, 2008]

This post is an excerpt from Healthcare Solved - Real Answers, No Politics.

Wednesday, December 9, 2009

A Duty to Warn: Healthcare Win or Financial Ruin

Just when we are convinced our politicians couldn't possibly do anything more ridiculous, they manage to exceed our expectations. Last night, the Senate reached a "compromise" on the healthcare bill. The plan includes lowering the age for Medicare to 55 for the uninsured and subsidizing it. There is also a proposed private plan option overseen by the OPM Federal Employee Health Benefits Plan. It is unclear from the details released yesterday exactly who this private plan is supposed to cover. We will have to wait to for the details to be released. However, should it not work as planned, these enrollees will become part of some yet to be determined government plan.

According to a speech given by Richard W. Fisher president & CEO of the Federal Reserve Bank of Dallas, Medicare already is projected to have $86 trillion in unfunded liabilities given those alive today. Last year, according to the Government Accountability Office (GAO), Medicare Part A (hospitalization) benefits began to exceed program tax in their revenues. The difference was made up by Medicare's Hospital Insurance (HI) Trust Fund by redeeming trust fund assets. According to the 2009 Annual Reports on Social Security and Medicare, “Growing annual deficits are projected to exhaust HI reserves in 2017…In addition, the Medicare Supplementary Medical Insurance (SMI) Trust Fund that pays for physician services and the prescription drug benefit will continue to require general revenue financing and charges on beneficiaries that grow substantially faster than the economy and beneficiary incomes over time.” [Note: This is 2 years earlier than projected last year.] We already have a program the Medicare trustees reported is "unsustainable," whose eligibility age should have been raised over the years to 69 or 70 given that Americans are living over 4 years longer than they were when the program started in 1965. This is a pay as you go program. The percentage of the eligible population in 1965 was 9%; today it's 13% and in 20 years it will be 19%. As you can see, less people are working to support a greater percentage of retirees. Adding more potential beneficiaries will only help to dramatically speed up the destabilization of healthcare benefits for current beneficiaries. There will be no choice but to ration care for our elderly.

Despite this, our politicians have decided to expand the program. This is outrageously fiscally irresponsible and catastrophically stupid. Did not one of our elected officials in Washington listen to the business news yesterday morning, when Moody's reported the US Government was in danger of losing its AAA credit rating in 2013?!?! Remember, this is the same group that has often been late to the corporate bankruptcy parties, only downgrading companies after the fact. This time Moody's sounded the alarm in time to warn us, yet Congress continues the spending unabated. Given this continuing pattern and the latest bill, count on it happening sooner rather than later. If our country loses its AAA credit rating, paying for healthcare will be the least of our worries. The dollar will instantly, irrevocably lose its world reserve currency status. That would create a worldwide panic, economic collapse and chaos. Make no mistake, the US would cease to be the economic power we know today. Our lives will be changed...just not the way any of us wants.

Tuesday, December 8, 2009

Correction: Mammogram Recommendations

Correction: On November 17 post on mammogram recommendations contained a misstatement. Based on the studies available in 2002, the USPSTF DID recommend in women age 40-49 receive annual mammograms. Since the verification hotlink was not included in the post, the only reasonable explanation for this error was that I had mistakenly viewed the previous recommendations (also found in the 2nd Print Edition of the US Guides) of the Task Force, which agreed with the present recommendations - my apologies. We will make certain the hotlinks are included in future posts. As of November 22, these post have been peer-reviewed by the AOCOPM publications committee, which will hopefully catch any errors prior to posting.


Some medical commentators, such as Bernadine Healy MD, have said that the Task Force is always flip-flopping on their recommendations. However, the Task Force is really looking at the whole body of scientific evidence available to us at a given point in time. Naturally, over time as evidence accumulates and studies are repeated, theories are either verified or disproven. This is why the standard of care for any disease typically does not change with one study. How many health recommendations have changed over the years – such as to use margarine rather than butter, would anyone still make that recommendation today? How is public health any different from any other area of medicine practice?

This mammogram discussion also brings to light the conflicting recommendations as to what constitutes the standard of care in medicine today. The issue is that there are different standards for the same disease across specialties and across the first world. Ironically, the USPSTF is recognized as “the standard” worldwide for making prevention guidelines because of the extensive review of medical research that goes into the process to determine public health guidelines for the general population. The American Cancer Society and other groups are looking at the sub-segment of the population diagnosed with cancer, not the proportion of those people relative to the entire population. Interestingly, no one has mentioned that these groups may have their own political, legal or monetary concerns.

From a public health perspective, if it costs more to screen people to find one case of disease than it does to treat one case of disease (at the average stage it would be found), there is no point in screening. It costs more than it’s worth. [Obviously the individual who may have cancer doesn’t feel that way. But from a societal standpoint, where money is not an unlimited commodity, we must seek the biggest bang for our healthcare buck.] In this case, a better screening test that does not yield a cumulative 43% false-positive rate by the ninth mammogram or a cheaper one to make it worthwhile for this age group.
 
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