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News Briefs

Updated May 8, 2008

Today's News
The average salary paid for physician practice administrative and staff positions in the metropolitan Philadelphia area increased by three percent in 2007, the same as last year. The Margolis & Company P.C. annual Salary Survey shows that salary increases were based on performance, cost of living and time on the job, while the survey also shows that medical practices are again giving their employees bonuses (48 percent gave bonuses this year as opposed to last year’s 37 percent and the prior year’s 58 percent). Of those practices who offered a bonus or incentive program to their employees, more than half (52 percent) offered it to all of their employees, while 38 percent of the medical practices surveyed reported that all employees received some form of bonus. (Margolis & Company P.C., May 2008)
Members of Congress are expressing concern and scheduling hearings about a Medicare plan to use competitive bidding for products such as wheelchairs and walkers, in a sign that lobbying by medical-equipment companies is gaining traction. Currently, companies receive a government-set fee to distribute such equipment for patients' home use, while under the competitive system, companies bid on how low a fee they would be willing to accept, and Medicare then limits distribution rights for a particular geographic area to several low bidders, reported the Wall Street Journal. An experiment with competitive bidding, mandated by a 2003 law, is starting in 10 cities this July and is expected to expand to 70 more cities including Los Angeles and New York next year. The project involves ten categories of medical products, including power wheelchairs, walkers, hospital beds and oxygen equipment, the Journal noted. Officials at the Centers for Medicare and Medicaid Services say competition could ultimately save $1 billion a year, while critics in Congress and elsewhere say service for the elderly will suffer if the bidding system drives some operators out of business, the Journal added. (Wall Street Journal, May 6, 2008)
A coalition of California hospitals, doctors, dentists and other health care providers has sued the state to block a 10 percent cutback in payments to them for treating the poor who are covered by Medi-Cal, a joint federal and state program. The $1.3 billion in cuts, set to take effect July 1, are included in Gov. Arnold Schwarzenegger's proposed 10 percent across-the-board reductions in the budget for state services, which the governor said is needed to close a fiscal 2009 budget deficit now approaching $20 billion, reported the Wall Street Journal. According to the suit, filed in state court in Los Angeles, California has violated state and federal law by failing to ensure that Medi-Cal reimbursement rates are sufficient for beneficiaries to have the same access to services as the general public, while the California Medical Association said Medi-Cal's payments to doctors are lower than those in any of the other 49 states and the District of Columbia, the Journal added. (Wall Street Journal, May 6, 2008)
Top Story
The number of medical malpractice case filings last year continued to decline in Pennsylvania but increased slightly in Philadelphia, according to data released by the Pennsylvania Supreme Court. Both numbers are down significantly from 2002, the year before the state Supreme Court instituted rules to prevent venue shopping for sympathetic juries and required lawyers to secure a certificate of merit for their cases, and the state legislature created the MCARE Fund to help subsidize malpractice insurance, reported the Philadelphia Business Journal.

There were 1,617 medical malpractice cases filed statewide in 2007, compared to 1,693 in 2006 and 2,903 in 2002. In Philadelphia there were 586 filings in 2007, up slightly from 569 in 2006, but on par with numbers from 2003 through 2006, and still less than half of the 1,365 filed in 2002, while data in the four suburban Philadelphia counties were also in line with numbers from 2003 through 2006, the Business Journal noted.

In Philadelphia, jury verdicts decreased in frequency and severity. There were 37 medical malpractice jury verdicts, down from 46 in 2006 and 56 in 2005, while the percentage of verdicts for the defense increased to 73 percent from 71.7 percent in 2006, 62.5 percent in 2005 and 59.2 percent between 2000 and 2003, the Business Journal reported. Statewide, the number of verdicts decreased to 185 from 229 in 2006 and 223 in 2005, while the percentage of verdicts for the defense (82.7 percent) was similar to 2006 (83.4 percent), the Business Journal said.

There were nine jury verdicts resulting in awards of $10 million or more between 2000 and 2003, compared to five such jury verdicts in the past four years: three in 2004, none in 2005, two in 2006 and one last year. All but one of those was in Philadelphia, with the other occurring in 2006 in Montgomery County, the Business Journal added.

(Philadelphia Business Journal, April 14, 2008)

Health Insurance
An expansion in Pennsylvania's Children's Health Insurance Program helped add more than 15,000 children to the program in a year, according to the state Department of Insurance. The program, one of the country's oldest and most successful, grew by nearly 3,000 from February to April, leaving about four percent of children in the state without health insurance, one of the lowest percentages in the country, reported the Tribune-Review. Pa.’s CHIP waiting list emptied during the past year, one year after the state got permission from the federal government to increase income eligibility – to about $42,000 for a family of two and $66,600 for a family of four, the Tribune-Review added. (Pittsburgh Tribune-Review, May 3, 2008)
The Medicare Health Support program, a three-year experiment to see whether disease management can prevent expensive hospital visits for people with chronic conditions like congestive heart failure and diabetes, may cost more than it saves. After paying eight outside companies about $360 million since mid-2005 to deliver disease management services, using nurses who periodically place phone calls to patients to check whether they are taking their drugs and seeing the right doctors, Medicare is still trying to figure out whether the companies were able to keep people healthier, while preliminary data indicate that the government is unlikely to save money, reported the New York Times. Several of the companies, including two that specialize in disease management, Healthways and Health Dialog, are pressing Medicare to continue the project in some fashion beyond the end of this year, saying the government mishandled the experiment, the Times noted. Medicare says the experiment so far has not reduced medical bills enough to offset the fees the companies are charging the government – as much as $2,000 a year for each patient – while a final accounting of the experiment is likely to come no sooner than next year, the Times added. (New York Times, April 7, 2008)
Health insurers are beginning to mine their patient data to look for drug safety red flags. WellPoint Inc., in collaboration with the Food and Drug Administration, plans to launch one of the first real-time drug-surveillance systems: starting early next year, the insurer will systematically scan the medical information of more than half of its 35 million members to look for hidden patterns or spikes in medical problems that might be linked to certain medication or combination of drugs as they happen, reported the Wall Street Journal. Until now, the drug-safety monitoring system used by the FDA has been spotty, slow and passive, relying largely on harried doctors and drug companies to report problems they see crop up with patients, and capturing less than 10 percent of bad reactions, the Journal added. (Wall Street Journal, April 15, 2008)
Congress should establish a budget-neutral adjustment to increase payments for doctors who provide primary care services, the Medicare Payment Advisory Commission recommended. The payment adjustment would be part of Medicare’s physician fee schedule and would be payable for certain services under the statutory definition of primary care, including office and home visits, and visits to patients in nonacute facilities, reported Modern Physician. HHS would establish criteria to determine which physicians would be eligible to receive the adjustment, while specialty physicians could stand to lose financially under this proposal, and some specialty societies are hoping that Congress will pursue other avenues to improve primary care payments, Modern Physician added. (Modern Physician, April 9, 2008)
Health Networks
Twenty Philadelphia-area hospitals and health systems are participating in a regional "green hospital" pilot project aimed at making medical centers more environmentally friendly. The initiative was established last year by the Healthcare Improvement Foundation, a coalition of Delaware Valley hospitals working together to promote community health and patient safety, the Pennsylvania Department of Environmental Protection and the U.S. Environmental Protection Agency, reported the Business Journal. The project's four main objectives are developing new strategies for reducing hospital waste, increasing recycling, expanding and standardizing environmentally preferred purchasing, and incorporating the latest energy efficient and environmentally sound building practices, the Business Journal added. (Philadelphia Business Journal, March 24, 2008)
Chestnut Hill Hospital has recently joined Penn Presbyterian Medical Center’s Heart Rescue Program. The helicopter transport program was established by the West Philadelphia hospital nine months ago to improve patient care by reducing the time it takes for heart attack patients transferred from other hospitals to receive care at Presbyterian. Ideally, the time from entering the ER to getting the blockage cleared in the cath lab should be within 90 minutes, while the program, working with five referral hospitals, has cut its average time from more than three hours to 127 minutes, reported the Business Journal. The hospitals in the program also include Nazareth Hospital in Northeast Philadelphia, Virtua Memorial Hospital of Burlington County in Mount Holly, and Cape Regional Medical Center and Shore Memorial Hospital in South Jersey, the Business Journal added. (Philadelphia Business Journal, April 28, 2008)
Physicians can now sign up to receive prescription drug safety alerts via e-mail instead of through postal mail. The online network is being launched by a nonprofit group called the iHealth Alliance, which is operated by Medem Inc., while the alerts will be focused by specialty and will be limited almost exclusively to alerts that drug makers send out in "Dear Doctor" letters: significant drug-label changes, warnings and recalls, reported the Wall Street Journal. Until recently, drug companies felt bound by federal regulations dating back to the pre-Internet era that described how to send these types of communications through a paper-based system, while the FDA issued guidance in 2006 saying the rules were outdated and that it was acceptable for the messages to go out by e-mail, the Journal noted. Drug makers will pay to use the new system, which will be free for doctors and won't include any drug-company marketing materials, while doctors who don't sign up for it will continue to receive the notifications through the mail, the Journal added. (Wall Street Journal, March 25, 2008)
The physician-owned pediatric medical group formerly known as Children's Health Associates is branching out into operating primary care practices. With 240 physicians at 45 practices sites throughout New Jersey and southeastern Pa., Advocare is among the top five physician-owned and -operated medical practices in the country, while it decided to expand beyond pediatric practices and into primary care practices after determining their model could be applied to family doctors as well, reported the Business Journal. About three dozen of the 240 doctors in the practice are family physicians, most of whom have joined over the past year. Under Advocare's business model, practices are merged into the medical group, not purchased, and doctors are given the option of being paid a salary, but most choose to become a partner in the organization, the Business Journal added. (Philadelphia Business Journal, March 24, 2008)
Health Policy
The pace of health care quality improvement appears to be slowing, according to the Agency for Healthcare Research and Quality's fifth annual report compiling federal and state data on more than 200 quality metrics. A composite measure of health care quality improved at a 2.3 percent average annualized rate between 1994 and 2005, with the rate falling to 1.5 percent from 2000 to 2005, reported American Medical News. In a first stab at examining the cost efficiency of the American health care system, AHRQ noted that costs, as estimated by the Centers for Medicare & Medicaid Services, jumped 6.7 percent from 1994 to 2005, although AHRQ said that cost and quality cannot be reliably compared because expenditures are comprehensively measured, but quality is not, AMNews added. (American Medical News, April 28, 2008)
The Pennsylvania Patient Safety Authority released its 2007 Annual Report outlining a strategic plan that aligns its activities more closely with its educational and quality improvement mission. Selected initiatives are aimed at educating hospital boards in their role in promoting patient safety, creating an online forum for more routine sharing of best practices and lessons learned among patient safety officers and creating a patient safety liaison pilot program that will offer health care facilities on-site education or quality improvement assistance from the Patient Safety Authority. The data in the 2007 Annual Report shows that there is substantial variation in the number of reports submitted by different health care facilities.

While a vast majority of hospitals are reporting serious events (events that cause harm to the patient) and incidents (events that do not cause harm to the patient), the volume varies greatly from facility to facility, which the Authority attributes largely to differences among them regarding how to interpret language in Act 13 as to what is reportable. The Authority will work with the Department of Health to offer facilities more guidance as to what should be reported to bridge the gap in facility reporting levels. (Patient Safety Authority, April 30, 2008)

Drug and medical device companies should be banned from offering free food, gifts, travel and ghost-writing services to doctors, staff members and students in all 129 of the nation’s medical colleges, the Association of American Medical Colleges has concluded. The proposed ban is the result of a two-year effort by the group to create a model policy governing interactions between the schools and industry and, while schools can ignore the association’s advice, most follow its recommendations, reported the New York Times. In addition to the gift, food and travel bans, the report recommended that medical schools:
  • Should "strongly discourage participation by their faculty in industry-sponsored speakers’ bureaus," in which doctors are paid to promote drug and device benefits.
  • Set up centralized systems for accepting free drug samples or "alternative ways to manage pharmaceutical sample distribution that do not carry the risks to professionalism with which current practices are associated."
  • Audit independently accredited medical education seminars given by faculty "for the presence of inappropriate influence."

(New York Times, April 28, 2008)

Doctors who want to go paperless when ordering drugs for their Medicare patients now have a set of federal standards on how to do it, while those who are prescribing electronically already have a year in which to become compliant with the rules. The Centers for Medicare & Medicaid Services on April 2 released final e-prescribing regulations for Medicare Part D under which physicians and pharmacies will not be required to use electronic prescriptions but must follow the new standards if they do, reported American Medical News. The regulations, set to take effect in April 2009, have four categories – formulary and benefits, medication history, fill status notification, and provider identifiers – while the standards, required by Medicare law, will govern how physicians, pharmacies and drug plans will communicate electronically to handle drug orders, AMNews added. (American Medical News, April 28, 2008)
Hospitals & Medical Schools
Brandywine Hospital has a full-time neurosurgeon on staff for the first time since it closed its trauma center in 2002 in what may be a precursor to resuming trauma care in Chester County. Chester County, with 485,000 residents, is the largest county in Pa. without a trauma center to care for critically injured patients, while high medical malpractice insurance costs factored into the decision to close the trauma center, reported the Business Journal. Brandywine's President and CEO Mark A. Benz said that the hospital is interested in reopening a level-II trauma center; that he hopes the recruitment of Dr. Andrew Freese, Brandywine's new medical director for neurosurgery, is a first step toward that goal; and that the hospital would need financial help to do so because of the costs it would incur to hire three neurosurgeons to provide 24-hour, seven-day-a-week coverage in a trauma center, the Business Journal noted. Chester County recently established a task force comprised of federal, state and county officials; business and health care industry representatives and community leaders to study if a new trauma center is needed and, if so, how to generate public and private funds to help support one, the Business Journal added. (Philadelphia Business Journal, April 11, 2008)
Reports of patients who acquired infections in Pennsylvania hospitals rose 57 percent in 2006 – a spike analysts attribute to better reporting and added categories. According to the Pennsylvania Health Care Cost Containment Council, the state's 165 general hospitals reported 30,237 infections in 2006, for a rate of 19.2 per 1,000 cases; compared to 19,154 cases, or rate of 12.2 per 1,000, the previous year, reported the Morning Call. The council attributed the increase to significant strides hospitals made in identifying and reporting infections that came from catheters, surgery and unwashed hands, while the council required hospitals to report even more types of infections beginning in the latter half of 2005, the Morning Call noted. Because changing variables did not permit an apples-to-apples comparison from one full year to the next, the council also provided fourth-quarter results, which were more alike: infection rates for the quarter dropped from 16.3 per 1,000 cases to 15.1, a direction that council officials attributed to prevention efforts in hospitals, the Morning Call added. (Morning Call, April 10, 2008)
The North Philadelphia Health System unveiled an expanded $4.5 million emergency department at St. Joseph's Hospital.

The new ER is more than double the size of the former emergency room at the North Philadelphia hospital at 16th Street and Girard Avenue, and can accommodate 22,000 patients annually, reported the Business Journal. NPHS named the facility in which the ER is housed the G. Fred DiBona Jr. Medical Pavilion, after the late Independence Blue Cross executive and the health system's founding chairman, while IBC provided $100,000 in funding for the project, which was also supported by a $1.5 million state grant, the Business Journal added. (Philadelphia Business Journal, April 15, 2008)

On average, Pennsylvania's hospitals are making money, but a quarter of them are still in the red, according to a report released by the Pennsylvania Health Care Cost Containment Council. Forty-one facilities, or 24 percent of the 170 general acute care hospitals statewide, lost money in fiscal 2007, while the number of hospitals with a three-year average total margin of 2 percent or less grew to 29 from 14, reported the Business Times. The average statewide operating margin increased to 4.82 percent in fiscal 2007 from 3.99 percent in 2006, while the average total margin statewide, which includes revenue from investments and other sources unrelated to patient care, grew by more than a full percentage point to 6.51 percent in fiscal 2007 from 5.39 percent in fiscal 2006, the Business Times noted. Nearly three-fourths of the increase in total margin came from growth of $341 million in operating income, the Business Times added. (Pittsburgh Business Times, April 18, 2008)
Regulation & Law
Leaders on the Senate Finance Committee are working to move forward on a Medicare bill that would stave off Medicare physician payment cuts. Sen. Max Baucus (D-Mont.), who chairs the panel, and Sen. Chuck Grassley (R-Iowa), its ranking member, are working with Senate leadership to move a bill this spring that is expected to include several provisions in a bill introduced by Sen. Debbie Stabenow (D-Mich.) that would halt any cuts to Medicare physician payments over the next 18 months, reported Modern Physician. The measure would begin on July 1, staving off a scheduled 10 percent cut to physician reimbursement, while maintaining physician payments at their current level for the rest of 2008, and in 2009 implementing a 1.8 percent increase, Modern Physician added, noting that temporary halts to these types of payment reductions—triggered by Medicare’s sustainable growth-rate formula—have been implemented frequently by Congress over the past five years, Modern Physician. (Modern Physician, April 1, 2008)
The Bush administration violated federal law last year when it restricted states' ability to provide health insurance to children of middle-income families, and its new policy is therefore unenforceable, according to a ruling by the Government Accountability Office. The ruling strengthens the hand of at least 22 states, including New Jersey, that already provide Children's Health Insurance Program coverage or want to do so, as the accountability office said the new policy amounts to a marked departure from a longstanding, settled interpretation of federal law, which must be submitted to Congress for review before it can take effect, the Times noted. The federal Centers for Medicare and Medicaid Services maintains that its Aug. 17 letter is still in effect, which told states what steps they needed to take to be sure the children's health program would not displace or crowd out private coverage under group health plans, while New Jersey and several other states have filed lawsuits challenging the Bush administration policy, and Congress may consider legislation to suspend the directive, the Times added. (New York Times, April 19, 2008)
A bill that would prohibit discrimination by health insurers and employers based on the information that people carry in their genes won final approval in Congress. The legislation, which President Bush has indicated he will sign, prohibits health insurance companies from using genetic information to deny benefits or raise premiums for individual policies – it is already illegal to exclude individuals from a group plan because of their genetic profile – while employers who use genetic information to make decisions about hiring, firing or compensation could be fined as much as $300,000 for each violation, reported the New York Times. Some patients worry that they may be denied jobs or face higher insurance premiums if a genetic red flag shows up in their medical records, while many who do learn that they are at higher risk for a disease opt not to ask their insurance companies to cover the costs of the genetic test, to keep the information secret. Some try to persuade medical professionals not to enter the test results in their health records; others keep the information from even their own doctors, the Times noted. The bill may be hard to enforce, some experts say, and it does not address discrimination by long-term care insurers or life insurers, the Times added. (New York Times, May 2, 2008)
The Pennsylvania House approved legislation that would impose new underwriting guidelines on health insurance plans offered to individuals and small businesses. The legislation, which now moves on to the Senate, would limit the ability of health plans to consider certain factors such as health history in setting rates, while insurers could consider age and geographic region in setting rates, reported the Post-Gazette. The bill also would require insurers to spend 85 percent of premiums on health care or be required to issue rebates to policyholders, while it also would allow the Insurance Department to disapprove a rate increase request, in part, because the insurer has not operated efficiently or has not controlled costs for avoidable hospital-acquired infections or management of chronic disease, the Post-Gazette added. (Pittsburgh Post-Gazette, April 2, 2008)

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