HealthLawProf Blog

Editor: Katharine Van Tassel
Concordia University School of Law

Friday, October 31, 2008

Some at FDA Oppose Rules Against Suing Drugmakers

The Washington Post reports that congressional investigators said Wednesday that top scientists and career employees at the FDA opposed agency regulations that weaken consumers' ability to sue drugmakers.  The Washington Post writes,

Gavel4At issue is language in a drug labeling rule from 2006 that effectively limits when people can sue in state court over injury claims involving medications. The FDA contends federal regulations prevail when there is a conflict with state law. This concept is called preemption.

Internal agency documents showed that career officials opposed this approach, according to a report released by Rep. Henry A. Waxman (D-Calif.), chairman of the House Oversight and Government Reform Committee. In the past, the agency had viewed private suits as an additional layer of protection against unsafe drugs, the report said.

"Much of the argument for why we are proposing to invoke pre-emption seems to be based on a false assumption that the FDA approved labeling is fully accurate and up-to-date in a real time basis," the report quoted John Jenkins, a doctor who oversees the FDA's new drug reviews, as saying. "We know that such an assumption is false."

Patients injured by drugs have won suits against drug manufacturers for failing to warn against certain dangers.

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October 31, 2008 | Permalink | Comments (0) | TrackBack (0)

Nobelist Sees US Accepting Universal Health Care

The Washington Post reports that Nobel Prize-winning economist Paul Krugman believes universal health care may soon become an accepted feature of American life.  The Washington Post writes,

Wwwnewsweekcom_paul_krugmanIn an interview with the Bulletin of the World Health Organization, the Princeton University professor says the U.S. has retirement and social security systems that are "in some ways more comprehensive" than many European countries.

He says Americans would find universal health care inconceivable to live without once they see the benefits of a good plan.

In the interview published Friday, Krugman said he was optimistic because he feels there's growing consensus on what is needed, unlike in 1993 when the Clinton administration tried to draft an agreement.

Some 45 million Americans lack health care.

October 31, 2008 | Permalink | Comments (1) | TrackBack (1)

Thursday, October 30, 2008

Obama Jumps on McCain Adviser's Health Remarks

The Washington Post reports that Sen. Barack Obama's presidential campaign claimed Tuesday that comments by a top adviser to John McCain reinforced Obama's contention that millions would be worse off if they lose employer-sponsored health coverage and end up buying it themselves.  Kevin Freking writes,

Obama_and_mccain2McCain wants to change the current income tax treatment of health insurance, treating payments toward health insurance as taxable wages. In exchange, individuals would get a $2,500 tax credit and families would get a $5,000 credit when buying health coverage.

Some health analysts say the Republican's plan would erode employer-based health insurance coverage by encouraging younger, healthier workers to shop around and find a better deal directly from an insurer in the individual market. And, if those workers dropped employer coverage, some companies would eliminate coverage entirely because of the costs associated with insuring older or less healthy employees.

Douglas Holtz-Eakin, a domestic policy adviser for McCain, attempted to assure that such a scenario would not occur, but gave Obama an opening.

"Why would they leave?" Holtz-Eakin said in a story published by "What they are getting from their employer is way better than what they could get with the credit."

Obama's campaign quickly seized on the comment. In remarks prepared for delivery Tuesday in Harrisonburg, Va., Obama described Holtz-Eakin's comments as a "stunning bit of straight talk, an October surprise from his top economic adviser."

"(Holtz-Eakin) said that the health insurance people currently get from their employer is and I quote 'way better' than the health care they would get if John McCain becomes president," Obama said. "Now this is the point I've been making since Sen. McCain unveiled his plan. It took until the last seven days of this election for his campaign to finally admit the truth. But hey, better late than never."

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October 30, 2008 | Permalink | Comments (1) | TrackBack (1)

FDA's Stance on Bisphenol A is Questioned

The Los Angeles Times reports that an independent panel of scientific advisors said the FDA's conclusion that bisphenol A is safe for use in food containers is badly flawed because the agency did not consider all the data.  The Los Angeles Times writes,

PlasticThe chemical, known as bisphenol A, is used to make plastic for food packaging, baby bottles and other consumer and medical goods. Environmental groups want to ban BPA in products for infants because of concerns that it can interfere with their development. But the FDA recently said there was no harm from the low doses of BPA that babies, children and most adults get by eating foods from containers made with the chemical.

Asked by the FDA to review that conclusion, a panel of outside advisors delivered what amounted to a scientific rebuke.

"The margins of safety defined by FDA as 'adequate' are, in fact, inadequate," the report said. The advisors found that the FDA had not considered all available, credible scientific evidence, and urged the agency to essentially go back to the lab.

The report came as a surprise to environmentalists and supporters in Congress. Citing some advisors' ties to industry, critics had initially questioned the panel's objectivity.
The report will be discussed at a meeting of the FDA's science board Friday, but what it will mean for consumers was not immediately clear.

Consumers can reduce their exposure by avoiding plastic containers imprinted with the recycling number 7. Many of these contain BPA.

October 30, 2008 | Permalink | Comments (0) | TrackBack (0)

Wednesday, October 29, 2008

How Obama would Change Health Care

The Washington Post reports on Sen. Barack Obama's health care reform proposals.  Amy Goldstein writes,

Barack_obama_2_3On the ninth floor of an office building just off the Boston Common, a group called Health Care for All runs a help line that, not long ago, got 40 calls a month. Today, the calls each month have swelled to 3,000, as people throughout Massachusetts phone in for guidance in navigating a state experiment in health reform that is the most ambitious in the country -- and a test of Sen. Barack Obama's vision for reshaping health care nationwide.

Kate Bicego, the help line's manager, slipped on her headset one recent afternoon as a call came in from Travis Lynn, a 26-year-old from Jamaica Plain with asthma and a part-time job at an old movie theater. He wanted to renew his enrollment in Commonwealth Care, government insurance that Massachusetts now offers adults who cannot get coverage through their work or afford it themselves. After a few questions, Bicego told him: "So, it sounds like you will still be eligible . . . premium-free, with vision, dental and medical."

Lynn is one of 439,000 people here who have gained insurance since Massachusetts embarked two years ago on a path to near-universal coverage. More than half of them are paying toward it; the rest, like Lynn, get it free. How close Massachusetts can come to its goal -- and what obstacles it encounters -- is significant, because its strategies resemble much of the approach to health care that Obama has said he would pursue if elected president next week.

Obama says he would keep the familiar arrangement in which most Americans get health insurance through their jobs, as Massachusetts is doing. Yet he also favors profound -- and controversial -- changes that Massachusetts also is putting in place: Expanding government insurance programs and subsidies. Requiring employers to offer their workers coverage or face penalties if they do not. Forbidding insurance companies to reject anyone or charging more if they are sick. Creating a national health insurance exchange to help people to find and compare private insurance policies on their own.

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October 29, 2008 | Permalink | Comments (0) | TrackBack (0)

How McCain would Change Health Care

The Washington Post reports on Sen. John McCain's health care reform proposals.  Amy Goldstein writes,

John_mccainWhen Diane Derichs's husband was retiring from his assembly-line job making fruit bars for ConAgra Foods, the couple invited over an insurance agent to help her find a health plan.

A part-time hairdresser, Derichs, at 58, was too young for the Medicare that her husband, Vernold, could already get. Sitting at their kitchen table in a St. Paul suburb, Derichs told the agent about the back surgery she had once needed for her scoliosis, the bad tendons in her feet, the lupus that causes painful sores on her skin.

Blue Cross Blue Shield, the agent discovered, wouldn't accept her. Nor would Mutual of Omaha. Or any other company he checked. "It's like, whammo, don't get sick," Derichs said. "As soon as I said 'lupus,' it was just like: 'Red flag. Sorry, can't do anything.' "

And so, on the agent's advice, she signed up for the Minnesota Comprehensive Health Association, a last-ditch chance at coverage that the state offers to those the insurance industry does not want.

How well this nonprofit corporation -- and similar ones set up by nearly three dozen other states -- can serve insurance castaways such as Derichs is a test of Sen. John McCain's road map for the nation's health-care system. High-risk pools, as such arrangements are known, are a linchpin of the Republican presidential nominee's thinking about how to make health insurance more plentiful and less expensive.

If McCain is elected president next week, he has said, he would work to remove the tax preference for company health benefits and offer Americans tax credits to put toward any health plan they choose. He wants to let people buy health plans from insurance companies anywhere in the country, preempting state regulations that spell out whom insurance carriers must cover and what kinds of benefits they must provide.

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October 29, 2008 | Permalink | Comments (0) | TrackBack (0)

Tuesday, October 28, 2008

California High-Risk Pool for Medically Uninsurable Helps Fewer Residents

The Los Angeles Times reports that a $75,000 benefit cap, high deductible and costly premiums make the Major Risk Medical Insurance Program unavailable, ineffective or unaffordable for many. Gov. Arnold Schwarzenegger recently vetoed a bill to expand the pool.  Jordan Rau writes,

Stethescope4Dave Dunlap is a Kern County trucker with a failing liver. Like about 600,000 Californians, he is too sick to qualify for private insurance on the open market.

"I'm trying to fight to get a transplant," he said. "Everyone's waiting for me to have a way to pay for it. I can't even get on the donor list until I have a way to pay for it."
California is supposed to have a solution for people like Dunlap. It is one of 35 states that arranges health coverage for people rejected by commercial companies because they have blemished medical histories.

This group -- known as "medically uninsurable" -- accounts for about an eighth of the 5 million Californians who lack health insurance. Most are self-employed, work for companies that don't provide insurance or don't have a job.

But California's publicly subsidized high-risk pool, long one of the least generous in the country, has atrophied over the tenure of Gov. Arnold Schwarzenegger -- even as the governor put the plight of the uninsured at the top of his political agenda.
Rising premiums and limited subsidies have made the Major Risk Medical Insurance Program either unaffordable, unavailable or ineffective for many of those who most need health insurance.

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October 28, 2008 | Permalink | Comments (1) | TrackBack (1)

Diabetes Drug Costs Soaring, Topping $12.5 Billion Last Year

The Washington Post reports that Americans with diabetes nearly doubled their spending on drugs for the disease in just six years, with the bill last year climbing to an eye-popping $12.5 billion.  Carla K. Johnson writes,

Stethescope_7Newer, more costly drugs are driving the increase, said researchers, despite a lack of strong evidence for the new drugs' greater benefits and safety. And there are more people being treated for diabetes.

The new study follows updated treatment advice for Type 2 diabetes, issued last week. In those recommendations, an expert panel told doctors to use older, cheaper drugs first.

And a second study, also out Monday, adds to evidence that metformin - an inexpensive generic used reliably for decades - may prevent deaths from heart disease while the newer, more expensive Avandia didn't show that benefit.

"We need to pay attention to this," said Dr. David Nathan, diabetes chief at Boston's Massachusetts General Hospital, who wrote an editorial but wasn't involved in the new studies. "If you can achieve the same glucose control at lower cost and lower side effects, that's what you want to do."

The studies, appearing in Monday's Archives of Internal Medicine, were both funded by federal grants.

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October 28, 2008 | Permalink | Comments (1) | TrackBack (1)

Monday, October 27, 2008

Fresh Hopes and Concerns As Fetal DNA Tests Advance

The Washington Post reports that doctors have started using powerful new DNA tests to screen fetuses for a wider range of genetic abnormalities, spotting more problem pregnancies early but stirring fears that the results will increase abortions as well as confuse and needlessly alarm many couples.  Rob Stein writes,

Genes_1The tests, which use "gene chips" to detect much subtler chromosomal variations than standard prenatal testing can, have also triggered complaints that they mark another step toward a society that seeks to weed out aberrations in the quest for the perfect child.

Proponents argue that the tests allow couples to harness the latest molecular technology to target the most devastating genetic syndromes, alleviating their worries in some cases and in others identifying abnormalities soon enough to terminate the pregnancy or prepare to care for an afflicted baby.

But critics say the tests have not been thoroughly validated and threaten to produce a flood of murky, misleading results that will subject emotionally vulnerable couples to unnecessary anxiety, perhaps prompting some to abort healthy pregnancies.

Some worry that the technique could be used to hunt for the rapidly growing list of genetic markers that merely signal an increased risk for cancer, diabetes, mental illness, obesity, addiction and other conditions later in life. Someday, similar tests could perhaps even vet fetuses for traits associated with beauty, personality or intelligence.

"It's a classic Pandora's box," said Leslie G. Biesecker of the federal government's National Human Genome Research Institute. "Like any powerful technology, it solves some problems while at the same time creating new ones. How you use a powerful technology decides whether it's good or bad."

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October 27, 2008 | Permalink | Comments (0) | TrackBack (2)

AIDS Treatment Should Start Sooner, Study Finds

The Washington Post reports that a large new study could change the care of hundreds of thousands of Americans, suggesting that people who have the AIDS virus should start drug treatments sooner than current guidelines recommend.  Marilynn Marchione writes,

Red_ribbonThe study found that delaying treatment until a patient's immune system is badly damaged nearly doubles the risk of dying in the next few years compared to patients whose treatment started earlier.

Doctors have thought it would be better to spare patients the side effects of AIDS drugs as long as possible.

"The data are rather compelling that the risk of death appears to be higher if you wait than if you treat," said Dr. Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases, which helped pay for the study.

If the results prompt doctors to change practice _ as Fauci and other AIDS specialists predict _ several hundred thousand Americans who are not taking AIDS drugs now would be advised to start.

The study was reported Sunday at an infectious diseases conference in Washington.

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October 27, 2008 | Permalink | Comments (1) | TrackBack (1)

Sunday, October 26, 2008

A Plan to Improve Health Care and Limit Costs

The New York Times provides an interview with Scott Serota, President and CEO of the Blue Cross and Blue Shield Association, about the association's newly adopted four-point initiative aimed at containing health care costs and improving care.  Elizabth Olson writes,

Wwwnytimescom_scott_serotaThe issue of health care costs usually comes up for discussion right after the economy as costs for businesses and consumers continue to climb. The Blue Cross Blue Shield Association insures 102 million Americans — one in three people — and has networks that include 90 percent of the nation’s providers and 80 percent of its hospitals.

The association’s board just adopted a four-point initiative aimed at containing health care costs and improving care. The goals range from eradicating hospital infections to pushing for health care coverage for everyone. From Chicago, Scott Serota, the association’s president and chief executive, recently discussed the new goals:

Q. What was the impetus for adopting a new plan of action, and why now?

A. Much of what is discussed in virtually all forums as health care reform is really health care financing reform. We really have not gotten sufficient national attention on the real underlying issue, which is that the entire health care delivery system needs to be modified. We, the Blues, feel we should try to drive toward a vision for the health care delivery system which we can move collectively forward with our partners.

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October 26, 2008 | Permalink | Comments (1) | TrackBack (0)

Is Going Public with your DNA too Revealing?

US News discusses an interesting initiative by Harvard professor, George Church, called the Personal Genome Project, which seeks 100,000 volunteers to publish their genomes online in an attempt to advance science.  Although commendable, these volunteers, however, could potentially waive their privacy rights, find it harder to get health insurance, and suffer discrimination.  Nancy Shute writes,

Wwwhealthusnewscom_dnaFacebook has nothing on George Church when it comes to sharing sensitive personal details. This Harvard Medical School genetics professor happily posts his family medical history and ailments (narcolepsy, motion sickness) on the Web—and he's telling the world just what's in his DNA. As one of the first 10 people to publish their genomes online, Church hopes to make the point that sharing genes on the Internet can advance science further than the current system, in which DNA databases are protected from public scrutiny and individuals aren't identified.

In the same way that you have amateur astronomers who help track celestial events, we hope to inspire a whole generation of 'amateur geneticists' to mine DNA sequences," Church says. His Personal Genome Project is recruiting 100,000 volunteers who would be willing to tell all for science, and signed up 10 scientists, who presumably know enough to understand the potential risks of doing so, to be the first guinea pigs. Their genetic data was to be released October 20.

The notion is that linking genetic data and extensive personal information—traits such as height, weight, ethnic background, or a fondness for cheeseburgers—will make it easier to advance research on the genetic basis of diseases such as cancer and heart disease, which have so far eluded discovery. To protect privacy, most genetic databases that researchers mine to unearth keys to our individual idiosyncrasies have been stripped of that kind of personal data, or phenotype, and family histories. Another very 21st-century notion is that making the information open to all increases the odds of collaboration and speeds discovery—a scientific Wikipedia.

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October 26, 2008 | Permalink | Comments (0) | TrackBack (0)

Saturday, October 25, 2008

Medicare Officials to Review Insurers' Commissions

The Washington Post reports that federal health officials, on Friday, said that they will soon address growing concerns about the lucrative commissions that some Medicare insurers plan to pay their agents and brokers this year.  Kevin Freking writes,

Medicare_2In Medicare, the elderly and disabled can enroll in private insurance plans that assume responsibility for covering a participant's health benefits. Those plans get a generous government subsidy and now serve roughly 10 million people. The program is called Medicare Advantage.

Documents obtained from some companies participating in Medicare Advantage show that their agents stand to make $500 to $550 this year for enrolling a beneficiary into one of their plans. In subsequent years, the agents could make another $500 for every year the beneficiary stays with the plan. After five years, an agent could have made more than $2,500, which is quite a jump from previous years.

Such a financial reward is raising concerns that agents and brokers will work too aggressively to enroll people into plans that don't meet their health needs.

"Medicare Advantage plans that have nearly quadrupled agent commissions are putting profits before patients and that's wrong," Sen. Max Baucus, D-Mont., said in a news release Friday. "We can't let seniors remain at risk of being targeted by predatory sales agents looking to make a quick buck."

The Centers for Medicare and Medicaid Services recently issued regulations designed to curb abusive sales tactics in the Medicare Advantage program. The regulations went into effect Oct. 1, the start of the new marketing season. Plans can't begin enrolling new beneficiaries for their 2009 coverage until Nov. 15.

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October 25, 2008 | Permalink | Comments (0) | TrackBack (1)

Kennedy Focuses from Home on Health Care Overhaul

The Washington Post reports that Sen. Edward Kennedy is trying to lay the groundwork for a breakthrough on health care reform next year, though many believe the enormous undertaking has been made even more difficult by the troubled economy.  Kevin Freking writes,

Wwwwashingtonpostcom_edward_kennedyKennedy, aides say, has held several video conferences with lawmakers and staff in recent months as he fights from home to overcome brain cancer. His staff has held more than a dozen meetings in recent weeks with various advocacy and interest groups that will help influence the debate.

"We're carrying it out in his absence, but this is his doing," said an aide who was not identified because he was not authorized to speak publicly. "He's in constant touch with leaders in this effort. This is Senator Kennedy at the helm." The story was first reported by The Washington Times.

Kennedy doesn't want to repeat the steps that some say doomed health care reform under former President Clinton. That means acting quickly when Congress returns to Washington after the election and the holidays. Some say Clinton's political honeymoon was over by the time Congress took up his health care plan.

Kennedy is chairman of the Senate Committee on Health, Education, Labor and Pensions. Sen. Barack Obama's health care plan will be the starting point in Kennedy's efforts. That's a big assumption given that the presidential race is far from over. The Obama plan features many changes that Massachusetts enacted in 2006, such as greater use of government subsidies to help people afford coverage. However, Obama would not require adults to buy health insurance, as Massachusetts did. Obama does have a requirement that children be insured.

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October 25, 2008 | Permalink | Comments (0) | TrackBack (2)

Friday, October 24, 2008

On Health Plans, the Numbers Fly

The New York Times questions whether the statistics and forecasts cited by both presidential candidates in their proposals will carry any weight in the future.  Kevin Sack writes,

StethescopeEconomics, it is said, is the dismal science. Anyone paying close attention to the campaign debate over the economics of health care might wonder about the science part.

As Senators Barack Obama and John McCain battle over how best to control spending and cover the uninsured, they are both filling their speeches, advertisements and debating points with authoritative-sounding statistics about the money they would save and the millions of Americans they would cover.

But the figures they cite are invariably the roughest of estimates, often derived by health economists with ideological leanings or financial conflicts. Over time, these forecasts have become so disparate and contradictory as to be almost meaningless.

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October 24, 2008 | Permalink | Comments (0) | TrackBack (1)

Prescription Drug Injuries and Deaths Reach Record Levels

The Los Angeles Times reports that a watchdog group reports that 4,825 deaths and nearly 21,000 injuries occurred in the first three months of 2008. The drugs heparin and varenicline are cited as the most dangerous.  Thomas H. Maugh II writes,

Wwwlatimescom_prescription_drugsThe number of deaths and serious injuries associated with prescription drug use rose to record levels in the first quarter of this year, with 4,825 deaths and nearly 21,000 injuries, a watchdog group said Wednesday.

Those numbers represent a nearly threefold increase in deaths from the previous quarter and a 38% increase in injuries from last year's quarterly average, according to the Horsham, Pa.-based Institute for Safe Medication Practices.
The most dangerous medications were the anti-smoking drug varenicline, which was linked to 1,001 injuries and 50 deaths in the three-month period ending in March, and the blood thinner heparin, which was associated with 779 injuries and 102 deaths.

The data came from voluntary reports of adverse effects to the Food and Drug Administration, which made the data public after stripping information that identified victims. Because the reporting is voluntary, researchers have speculated that fewer than 10% of adverse events actually make it into the system.

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October 24, 2008 | Permalink | Comments (1) | TrackBack (1)

Thursday, October 23, 2008

Big Issue: Voters Look for Answers on Health Care

The Washington Post reports on a survey that shows that 78% of voters say health care is a very important or extremely important issue.  Both presidential candidates have proposed significant changes to the way Americans purchase health insurance.  Julie Pace writes,

Stethescope3Even if the issue doesn't often get star billing on the campaign trail, health care remains a huge issue for voters. It seems like everyone's got a story to tell about their medical challenges and how they do, or don't, get insurance coverage.

An Associated Press-Yahoo News survey taken last month shows that 78 percent of voters say health care is a very important or extremely important issue.

Both presidential candidates have promised that, if elected, they'll propose significant changes to the way Americans purchase health insurance, a process that is often cumbersome, confusing, and that has left 47 million people in the Unites States uninsured.

Republican presidential nominee John McCain is proposing a tax credit of up to $2,500 for individuals and $5,000 for families so people can buy the insurance of their choice. That credit would replace the tax break that people currently get when they obtain health coverage through their employer.

Democrat Barack Obama's plan calls for the government to subsidize health coverage for millions of Americans who otherwise could not afford it. He has also proposed a government-run plan that couldn't turn away people with certain pre-existing health problems.

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October 23, 2008 | Permalink | Comments (1) | TrackBack (2)

The Battle of the Medical Bills

The Los Angeles Times reports that doctors and insurers blame each other for an administrative headache that is driving up the nation's healthcare costs.  Daniel J. Costello, Lisa Girion and Michael A. Hiltzik write,

Stethescope2In late 2007, Centinela Hospital in Inglewood was losing nearly $1 million a month and had piled up $15 million in debt. Among the causes of the crisis: $25 million in overdue bills.

Collecting that money would have given Centinela a measure of relief. But the bills went unpaid, and the century-old medical center was sold. The new owners slashed services, closed half the operating rooms and laid off a third of the employees.

Who owed Centinela that elusive $25 million? According to hospital officials, it was health insurance companies.

"Insurers have found a very creative way of denying, delaying or slowing payments in a way that is having a real impact on patient care and some of our survival," said Von Crockett, Centinela's chief executive. "Every single doctor and hospital is writing off money they are legally owed but don't collect. It's an insane situation."

Doctors and hospital executives say collecting payments from insurers has become an expensive headache that is driving up the nation's healthcare costs.

Billing disputes and protracted payment delays are one consequence of a massive consolidation among health insurers that has created de facto monopolies in much of the country, the Los Angeles Times found.

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October 23, 2008 | Permalink | Comments (1) | TrackBack (0)

Wednesday, October 22, 2008

FDA: Incontinence Surgery Linked to Complications

The Washington Post reports that federal officials say a type of mesh used in surgeries to treat severe incontinence, cases of prolapsed uterus and other women's health problems has been linked to serious but infrequent complications.  The Washington Post writes,

SurgeryThe Food and Drug Administration said this week it has received more than 1,000 reports in the last three years of problems with surgical mesh used to repair pelvic organ prolapse and stress urinary incontinence. The mesh is inserted through the vagina, using minimally invasive surgical techniques.

The complications include erosion of the mesh through vaginal tissue, infection, pain and urinary problems. Some patients have experienced a recurrence of the original condition that the surgery was supposed to resolve. Others have had to undergo repeat surgeries to remove the mesh. Some suffered significant loss of quality of life, including pain during sexual intercourse.

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October 22, 2008 | Permalink | Comments (0) | TrackBack (4)

Health Insurers Reinvent Themselves as Money Managers

The Los Angeles Times reports that many people rush to open banks as more Americans open health savings accounts, a tax-sheltered way to pay medical bills. Managing that money is more profitable than offering health insurance.  Michael A Hiltzik writes,

Health_insurers_reinvent_themselvesWellPoint Inc., the nation's largest health insurance company, ran into a snag last year while pursuing an important new business initiative.

Federal banking regulators insisted on classifying WellPoint as a healthcare company. And that was interfering with its efforts to open a bank.

The Federal Reserve Board eventually agreed that the company's core insurance business could be considered financial services. But what about its mail-order pharmacy and its program for managing chronic diseases, which was overseen by WellPoint doctors and nurses? Wasn't that healthcare?

WellPoint finally convinced the Fed that those activities were merely "complementary" to its main business -- financial services. It pledged to limit them to less than 5% of total revenue.

That a medical insurer would agree to keep a lid on healthcare expenditures so it could get approval to open a bank illustrates a fundamental change in the industry: Insurers are moving away from their traditional role of pooling health risks and are reinventing themselves as money managers -- providers of financial vehicles through which consumers pay for their own healthcare.

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October 22, 2008 | Permalink | Comments (2) | TrackBack (1)