Author: James A. White

  • Obama to Tap Harvard Prof as Head of Medicare and Medicaid

    Medicare and Medicaid programs are slated for sweeping changes under the new health-care legislation and President Obama now has decided who should oversee the changes for the giant health programs.

    The president has selected a Donald Berwick, a pediatrics and health-policy prof at Harvard, to take the top post at the Centers for Medicare and Medicaid Services, which is in charge of the agencies providing health care for the elderly and low-income people. The CMS job, which is part of HHS, has been without a permanent occupant for more than three years.

    Berwick also is currently head of the Boston-based Institute for Healthcare Improvement and has pushed for change in the current U.S. health-care system. Among other things, he has urged greater access to patient records, better care coordination and paying health providers based on results rather than the number of procedures, Bloomberg notes.

    “We have really good data that shows that when you take patients and really inform them about their choices, patients make more frugal choices, they make more efficient choices about their care than the health-care system does,” Berwick said in the 2008 documentary, according to Bloomberg. Click on the YouTube video to see him giving a speech that year.

    The Senate needs to approve Berwick’s selection, and the nomination — which hasn’t been announced yet — could become an issue with Republicans opposed to the health bill. Here’s more from the WSJ.

    Medicare and Medicaid, both created in 1965, are central components for covering the uninsured and cutting costs under of the just-approved health overhaul. Medicaid, the joint federal-state program for the poor, will add coverage for 16 million more people by the end of the decade as part of the overhaul’s expansion of of health insurance; Medicare, the federal program mostly for the elderly, is slicing more than $400 billion from payments to health-care providers.


  • British Docs Urge No Smoking in Private Autos to Protect Kids

    smokeA proposal by British doctors to ban smoking in private cars has drivers, well, fuming.

    The Royal College of Physicians says passive smoke results in 300,000 extra visits by children to the doctor every year in the U.K. Banning smoking in autos, as well as in public places where kids congregate, would help fight problems like asthma and bacterial meningitis affecting tens of thousands of children, according to the 20,000-member group.

    The recommendation includes banning lighting up in cars even when children aren’t along for the ride. That goes beyond previous proposals by medical groups that urged no-smoking rules only when kids were in the car. Reuters notes that smoking in cars carrying children is already against the law in some parts of the U.S., Canada and Australia, while other countries are considering bans.

    The Royal College’s proposal goes well beyond that, causing some U.K. motorists to grouse. “The car is a private space and it crosses a line to start interfering in it, however much one disapproves of smoking,” a spokesman for the Association of British Drivers told the BBC.

    What’s the difference between banning smoking in cars and forbidding people from lighting up in their homes, where even kids are exposed to second-hand smoke, you might ask. “The doctors acknowledge that a ban on smoking in the home, however desirable it believes this to be, would be neither politically or practically possible, but sees the car as an intervention in the private sphere which the public would tolerate,” the BBC says in its report.

    You can read more in the group’sreport and see other information here. A letter from doctors’ groups to the Times of London is here.

    Image: iStockphoto


  • Genzyme Faces FDA Enforcement Moves Over Production Problems

    genzymeFallout from Genzyme’s production problems at its Allston, Mass., plant continue to bedevil the company, which announced it faces a slew of enforcements actions by the FDA.

    The details of the regulatory actions are yet to come. But Genzyme said it was told by the FDA that the moves probably will include a consent decree under which a third-party watchdog would monitor the plant’s operations “for an extended period” and decide if it’s living up to FDA rules. “Genzyme also would be required to make payments to the government and could incur other costs,” the biotech said in its announcement.

    Government consent decrees are the stuff of corporate nightmares and can take years to unwind, both in terms of their impact on a company’s finances and its operations. “This is going to be a significant hit to earnings for the foreseeable future,” an Hapoalim Securities analyst told Dow Jones Newswires.

    The Allston plant makes Genzyme’s two top-selling drugs, Gaucher’s disease treatment Cerezyme and Fabry disease drug Fabrazyme, among other treatments produced there. The facility was temporarily shut down last year after failing regulatory inspections, causing shortages of the medicines. Production is expected to continue at the plant, the company said.

    Meanwhile, on the investor front, activist Carl Icahn has nominated four directors to Genzyme’s board, including himself, for election at a May 20 shareholder meeting. More on Icahn’s interest and the problems leading up to the FDA actions is here, here and here.

    Photo: Associated Press


  • Nursing Homes Chafe Under Drug-Prescribing Rules

    bottleAgents of the Drug Enforcement Administration have been pushing harder to investigate cases of nursing-home staff giving powerful medications to patients without a doctor’s prescription. But if that sounds all well and good, some say it’s just the nub of a more-complicated situation.

    Trade groups for nursing homes and hospice-care facilities say “patients have been left to ‘languish in pain’ while nursing homes and pharmacies try to find ways to comply with DEA regulations requiring physicians, in most cases, to write prescriptions,” the WSJ reports this morning. The industry groups are pushing for a change in the law and the issue will be taken up at a Senate hearing today.

    The DEA has been ramping up efforts to fight prescription-drug abuse, which some experts say may surpass the abuse of illegal drugs, the article says. In nursing-home cases, DEA has been acting out of concern for patients, according to a letter to lawmakers in December from an assistant attorney general in the Justice Department, of which the DEA is part.

    But the industry groups say long-term facilities can’t afford doctors to write every prescription. “DEA’s reliance on hard copy prescriptions and failure to acknowledge the role of nursing in long-term care and hospice place additional burdens on prescribers, pharmacists and nurses and can substantially delay and in some cases, impede access to appropriate pain medication,” industry backers said in a brief quoted by the WSJ.

    Photo: iStockphoto


  • After White House and Congress, Health Bill Headed for Courts

    scalesThe executive and legislative branches have been the center of attention in Washington during the health-care fight so far, but the stage could soon be shared by the judiciary.

    Legal attacks on the overhaul will argue that Congress doesn’t have the right under the Constitution to force individuals buy health insurance, the WSJ reports this morning. Another theme for court challenges will be that Washington can’t require states to operate insurance exchanges, which will be created under the new health rules to offer coverage to individuals and businesses needing policies.

    The suits will be a test of the Constitution’s 10th Amendment that says powers not delegated to Washington belong to the states. Clint Bolick of the Goldwater Institute told NPR this morning that he is urging states to opt out of various provisions in the health law on the grounds it’s unconstitutional.

    “Here you have a right that’s been recognized under the Constitution — namely the right to direct one’s own medical affairs without excessive government regulation,” he said, and “you’ve got an area that is traditionally a matter of state concern, and the federal government is trying to impose on it.”

    The Supreme Court rejected 10th Amendment challenges to the Social Security Act in the 1930s, precedents that the court would have to reconsider if it wanted to strike down the health-care law, Yale Law’s Jack Balkin said in the WSJ. Working in favor of the objections to the new health rules is a 1992 opinion by Justice Sandra Day O’Connor, which struck down a federal plan to deal with radioactive waste by providing incentives to states to handle its disposal and imposing penalties.

    Whether the challenges will fly will take time for the courts to sort out. Meanwhile, the Obama administration is “taking nothing for granted,” having set up a cadre of lawyers to defend the health legislation, NPR said.

    Image: iStockphoto


  • Biogen Averts Proxy Fight, But Icahn Keeps Humming Same Tune

    icahnCarl Icahn and Biogen Idec agreed to avoid another proxy flight as the biotech gave its backing for a third Icahn representative to join its board. But if it sounds like the long-time activist is taking a new tack on Biogen, guess again.

    “At the right price, I think Biogen should be sold,” Icahn told Thomas Gryta of Dow Jones Newswires in an interview today. “I think breaking up the company is something that definitely should be
    focused on,” he said at another point. Undoing the merger of Biogen and Idec in 2003 would make each piece more attractive for a takeover.

    Of course, Icahn has put out these ideas before, but he did so today while declaring a new settlement with Biogen management and saying the company was making “great strides.” But he also pointed out that those gains had come since Icahn representatives won two board seats last year.

    As a result of the latest pact, Biogen named Eric Rowinsky, a cancer specialist, to its board from Icahn’s directors slate and Icahn agreed to back Biogen’s board nominees. Rowinsky previously held a top job with ImClone Systems, a company that Icahn and allies lead to a $6.5 billion purchase by Eli Lilly in 2008. In his DJ Newswires interview, Icahn said “there are a lot of analogies” between Biogen and ImClone.

    Icahn, who held about a 6% stake in Biogen at year end, thinks the company should be split between its neurology business, which includes multiple sclerosis drugs Tysabri and Avonex, and its cancer drugs like Rituxan. Biogen makes Tysabri with Irish drug maker Elan and Rituxan with Genentech, which is now part of Roche Holding.

    Biogen spokeswoman Amy Reilly told DJ’s Gryta that the deal was the result of “constructive
    dialogue” with Icahn. Here’s the company’s announcement. Proxy fights or the threat of them have been a regular thing between Icahn and Biogen, as you can see here and here.


  • The Morning After: Reaction to the House Health-Care Vote

    capitolIt took 14 months of birthing — and there’s still a little ground to go before it’s all official — but the health-care overhaul is effectively here. The opinions about what it all means remained mixed, but whether they were for or against the legislation, many health-care groups say they are focused now on trying to improve what they see as flaws. Here are some extracts from the statements:

    Pharmaceutical Research and Manufacturers of America
    “Our commitment to help pay for health care reform will require all of our companies to make some difficult choices moving forward –- on top of already losing more than 150,000 jobs since 2007 because of the recession and other economic factors. But throughout this long process, we have been guided by a belief that all Americans should have access to high-quality, affordable health care coverage and services. This legislation, while not perfect, is a step in that direction.”

    America’s Health Insurance Plans
    “The access expansions are a significant step forward, but this legislation will exacerbate the health care costs crisis facing many working families and small businesses.”

    American Hospital Association
    “After consultation with our state, regional and metropolitan hospital association partners and approval by the Board of Trustees, the AHA Saturday announced support for the House reform bill. …Yes, everyone has concerns about aspects of the bill; no stakeholder — or legislator — got everything they wanted, so we will seek changes as the reform journey continues.”

    American Medical Association
    “While the House-passed bill isn’t perfect, we cannot let the perfect be the enemy of the good when it comes to something as important as the health of Americans. By extending health coverage to tens of millions of uninsured, improving competition and choice in the insurance marketplace, promoting prevention and wellness, reducing administrative burdens, and promoting clinical comparative effectiveness research, this bill will help patients and the physicians who care for them. There are increased payments for primary care physicians caring for Medicaid patients and bonus payments for physicians in underserved areas.”

    Advanced Medical Technology Association
    “While we remain concerned about the effects of the medical technology tax, we applaud expanded insurance coverage for millions of American families and the significant progress in a number of important areas, including an enhanced program of clinical comparative effectiveness research that will improve medical decision-making and enhanced transparency in the financial relationships between providers and the health care industry.”

    AARP
    “We applaud the House for passing this critical legislation to make our health care system work for more Americans. Both chambers have now passed a bill that will make health care more affordable for American families, strictly limit insurance companies from denying affordable coverage because of age or medical history, and protect and strengthen the benefits promised to people in Medicare. …Most importantly, this final package closes the dreaded gap in Medicare drug coverage known as the ‘doughnut hole.’ For too long, seniors in Medicare have struggled with the rising cost of prescription drugs.”

    Communications Workers of America
    “H.R. 4872 is good start. It includes some penalties for employers who for too long have refused to pay their fair share and reassures workers that their families won’t lose health care if they change jobs or are laid off. It stops the worst abuses of insurance companies, like denying care based on pre-existing conditions, setting lifetime limits for coverage and dropping coverage when people need it most.”

    Generic Pharmaceutical Association
    “Today’s passage of health-care reform in the House provides both good and bad news for consumers. The good news is that more Americans will have health-care coverage and more seniors will have access to generic medicines, thanks to a fix to the so-called doughnut hole. … The bad news is that the bill provides a biogeneric pathway in name only, giving false hope to patients who desperately need access to life-saving biogeneric medicines.”

    American Diabetes Association
    “With the passage of health reform ‘just because you have diabetes’ will no longer be a lawful excuse to deny coverage, to charge exorbitant rates, or to take away care just when a person with diabetes needs it most. It gives all Americans with diabetes a fighting chance at controlling this devastating disease before they face blindness, amputation, heart disease, and kidney failure.”

    Photo: Associated Press


  • Why Doing Someting About ‘Pay for Delay’ Will Have to Wait

    vaultAmid all the ink going to what the proposed health-care overhaul would do, we wanted to note an easy-to-overlook provision that it won’t do: eliminate many so-called pay-for-delay deals.

    Those are the oft-criticized pacts under which branded drug makers give something to generic makers stall cheaper copycat versions coming on the market. The deals, which usually involve settlements of patent disputes between the generic and branded drug makers, result in consumers paying the higher branded prices until the generic counterparts arrive.

    President Obama’s health proposal unveiled last month included a provison to nix such deals that the Federal Trade Commission didn’t like and the House also such a ban in a separate bill. But it’s not going to happen, at least not as part of the overhaul package now nearing votes in Congress.

    The reason is because Democratic leaders are trying to avoid provisions that will kick up even more of a ruckus than they already face in trying to get a reconciliation bill through the House and Senate. Backers think they can return to the delay issue later in the year.

    “We’re pretty sanguine that we’re going to be able to get it done this year,” FTC Chairman Jon Leibowitz told Dow Jones Newswires yesterday. “We feel like we have a lot of support, that it is growing, and that it is bipartisan.” The FTC charges that the deals cost consumers $3.5 billion a year.

    But the Generic Pharmaceutical Association said that banning all pay-for-delay pacts would hurt consumers by sweeping out good settlements with the bad. “Such an across-the-board ban would reduce the number of patent challenges brought by generics, creating an unnecessary hurdle to bringing lower cost generic drugs to the market,” Kathleen Jaeger, the group’s CEO, said in a statement.

    Photo: New York Fed


  • Aetna: ‘We’ve Never Seen’ Such Rate Increases From Hospitals

    pillsOne of the most contentious front lines in the health-care cost wars is between hospitals and private insurers. That battle zone has gotten particularly hot in recent contract negotiations over reimbursement rates that hospitals are demanding from the insurers.

    “We’ve never seen the kind of increases we’re seeing right now” from hospitals, Aetna President Mark Bertolini says in a WSJ article this morning. From a typical rate increase of about 5% five years ago, he says Aetna this year has granted rate increases of more than 20% to 50 hospital operators the insurer considered “must have” choices to continue offering consumers.

    Hospitals say that low Medicare rates and cuts to Medicaid are forcing them to cover their costs elsewhere and that more often means from private insurers. They say low reimbursement rates have drained hospitals for years and have been made worse recently with more uninsured Americans needing uncompensated care.

    Health insurers point to data saying that hospital markets are 47% more concentrated today than 13 years ago. Insurers blame big hospital systems for buying up smaller medical centers and using their dominance in a region to demand big rate increases, the WSJ says.

    That market-clout issue was front and center in Boston yesterday where Massachusetts officials are trying to figure out what is driving up health costs so much. A report by the state AG earlier this year pinned much of the cost blame on some hospitals that leverage their market position to get much higher reimbursements from insurers than rival hospitals.

    An executive of Partners Healthcare, which operates one of the largest hospital and physician networks in the state, agreed that groups like his were part of the cost issue, but only part, the Boston Globe reported. The growing use of medical services as the population ages was another key cost driver facing providers, Partners COO Thomas Glynn said.

    Still, there was more that providers could do on costs, he said. “Do we have a cost problem? Yes. Are we working on it? Yes. Are we working on it hard enough? No.’’ Glynn told the Globe.

    The divide between hospitals and insurers is nothing new and has been seen again in the national health-overhaul debate. It’s not likely to go away anytime soon.

    Photo: iStockphoto


  • Health-Care Bill: When Might the White House Celebration Begin?

    This post by WSJ’s Laura Meckler also appears on the Washington Wire blog

    balloonsThe complex legislative maneuvering to pass health-care overhaul legislation has produced many questions and among them this: When can the White House declare victory?

    If the House passes the Senate health bill on Sunday, as Democrats hope, and President Obama signs it into law, the overhaul will be official -– signed, sealed and delivered. But the president is reluctant to celebrate, officials said, because the House Democrats will have also passed a companion measure fixing things they don’t like about the Senate bill, and that companion measure will still need to go through the Senate.

    Discussions are still ongoing, but press secretary Robert Gibbs said in an interview Thursday that the White House is not likely to stage a celebratory event after the House acts on Sunday, preferring to wait for the Senate to pass the companion bill first. That could easily take days. To celebrate the earlier step would likely annoy House Democrats, who are only voting for the Senate bill with the promise that the fixes will be approved as well, Gibbs said.

    Still, the president will probably have to sign the Senate bill into law so that the Senate can get to work, according to a ruling from the Senate parliamentarian. At that point, the overhaul will be law, and Obama will no doubt mark the moment. But in a weird twist, the White House doesn’t plan much pomp or celebration.

    “This is a very much a two-step process,” Gibbs said.

    White House officials say they’re not taking passage for granted, while Republicans say they can still defeat the bill.

    Image: iStockphoto


  • CBO Runs Through the Health Numbers, One More Time

    moneyThe Congressional Budget Office has finished its preliminary run-through of cost numbers for the latest — and perhaps final — version of the Democratic health plan before it comes to an expected vote as early as Sunday. Democrats liked what they saw and President Obama again delayed an Asia trip to make one final push on the overhaul. See more here.

    In its new estimate, the nonpartisan CBO sliced the numbers several ways. The estimates getting the most attention assume that Congress will actually vote on two pieces of legislation — the Senate health plan passed in late December that the House hasn’t yet approved and a so-called reconciliation bill making changes to the health opus that both chambers still must vote on.

    So if you can stand one more set of numbers, here we go:

    • The tab in the first decade for expanding coverage is $940 billion. After penalty payments by workers and employers without coverage and other items like taxes on “Cadillac” health plans, the net cost of added coverage would be $794 million.
    • The projected budget deficit would shrink by $138 billion over 10 years.
    • Some 32 million uninsured will get health insurance. Of those, 19 million people would start getting coverage in 2014.
    • Medicare spending would be reduced by 1.4% annually and Medicare’s solvency would be extended by at least nine years.
    • Federal spending for health-insurance exchanges would be $466 billion over the decade, intended mostly to help people who don’t get coverage through work.

    The $940 billion cost number is good news for Democrats, falling even below the $950 billion that the White House had originally estimated the package would cost. The CBO said it still had a lot of double checking to do so its estimate today was just preliminary.


  • Teva Outwrestles Pfizer to Land Generics Maker Ratiopharm

    pillThe world’s biggest generic drug maker is getting bigger with the announcement this morning that Israel’s Teva Pharmaceutical had won the bidding against Pfizer for Germany’s Ratiopharm Group. The pricetag: $4.97 billlion.

    A bidding contest had been dragging on for months for Ratiopharm, the world’s sixth largest generics maker. The deal is the biggest takeover in the generic drugs market since Teva bought U.S.-based Barr Pharmaceuticals for $7.46 billion in 2008.

    Others interested in the company included another generic maker, Actavis Group of Iceland, but Pfizer, which has been very interested in expanding its generics operations, was the last man standing in the competition against Teva, Dow Jones Newswires reported. It said Pfizer had been very interested in a deal, but the U.S. company, now the world’s largest pharma company, wasn’t prepared to put significantly more than 3 billion euros (about $4.1 billion) on the table.

    Pfizer, facing the expiration of patent protection on Lipitor starting next year, the biggest selling drug of all time, has been shifting away from the blockbuster-drug model and embracing more diversification through avenuess such as generics. Pfizer could consider German pharmaceutical company Stada Arzneimittel down the road if it wanted to make up for the loss of Ratiopharm, DJ Newswires said.

    While already the world’s biggest generics company, Teva gets about 30% of its revenues from branded drugs.

    Image: iStockphoto


  • FDA Looks to Streamline Rules for New Drug Cocktails

    fdaGetting one drug through the FDA approval process is hard enough but getting the go-ahead for multiple medicines at once so they can be used together in so-called drug cocktails can be Herculean.

    Now the agency is devising guidelines to speed up testing and approval of multidrug regimens for some of the world’s most deadly diseases, such as AIDS, tuberculosis and cancer, the WSJ reports this morning. Such a policy would be a first for the FDA, a spokesman says.

    Two pharmaceutical consortia want to use the new approach, the article says. One is a group of 10 drug companies and several nonprofit organizations convened by the Bill and Melinda Gates Foundation to develop medicines to fight tuberculosis. The other is an effort by Merck and AstraZeneca, which are jointly testing two anticancer agents. Others may be interested as well.

    Drug cocktails have been a big step forward in thwarting drug resistance because more mutations have to occur to block the effects of several drugs working together than are needed to escape just one medicine. Drug combinations also improve the chances of coming up with the mix that’s the most effective treatment.

    As we know, cocktail therapies slashed the death rate from AIDS. Tuberculosis is another target, but that disease is currently treated with drugs that are decades old. About a third of patients contract a TB strain that’s resistant to at least one first-line drug, according to the WSJ.

    The new guidelines could only be used for treatments aimed at life-threatening illnesses for which good treatment options don’t already exist, and for which multiple drug combinations are thought to have the best chance of success. Draft guidelines could come as early this summer.


  • Bedside Manner Doesn’t Include Sitting on Beds in British Hospitals

    bedsideIt’s getting close to April Fools Day but we’re told this is no joke: It seems that in a bid to cut down on the spread of infections, some British hospitals have taken to telling visitors and their medical staffs not to sit on the beds of patients.

    “We are committed to doing all we can to prevent infection and as a result have very low rates” of infections like MRSA and Clostridium difficile, a spokesman for Royal Surrey County Hospital NHS Foundation Trust, one of the British hospitals enforcing a no-bed-sitting policy, told the BBC. An official of the Scotland Patients Association was quoted elsewhere as saying that “there’s no way that anybody, after sitting on a bus or sitting anywhere in their outdoor clothes, should come in and sit on our patients’ beds.”

    Adopting the rules is a local decision and some hospitals have enacted them in recent years without drawing too much of a fuss. But a GP, Iona Heath, now has kicked the covers off the issue in an article in the journal BMJ. She says there’s “no hard evidence” for the prohibition, adding:

    Some of the most intimate and effective interactions between doctor and patient that I have either witnessed or experienced have occurred while the doctor has been sitting on the patient’s bed. Such interactions are precious and should be made easier rather than more difficult.

    There’s no question that hospitals are notorious domains for infections. Efforts at more frequent hand washing and eliminating white lab coats and other attire that could spread infections have been pushed in many places. The National Health Service has been out front on rules regarding staff clothing and some hospitals (U.K. institutions again among them) also are putting a damper on flowers intended for patients.

    All this is too much for Dr. Heath. ” ‘Do not sit on the bed’ and ‘No flowers’ are injunctions that are all too similar to ‘Do not walk on the grass’ and ‘No ball games,’ ” she wrote in the BMJ. “Such rules, unless absolutely necessary, have no place in hospitals, where joy is too often in short supply.”

    Standing poll: How does not sitting on a patient’s bed sit with you? Please give us your comments.

    Picture of Jimmy Steward sitting bedside with June Allyson in ‘The Glenn Miller Story’ from Everett Collection


  • WellPoint Spells Out 2010 Outlook, Using a Lot of Caveats

    insureRemember that investors meeting that WellPoint had planned in Indianapolis last month? The one that was canceled when CEO Angela Braly was summoned before a congressional committee to explain her company’s requested 39% rate hike in California?

    Well, it resurfaced in the form of a 15-minute conference call this morning. Here’s what happened:

    CFO Wayne DeVeydt forecast headwinds and told analysts that WellPoint expects to earn at least $6 a share this year. That would be a total of $2.6 billion, down 11% from last year’s $2.9 billion.

    The caveat, which he mentioned a couple times, is that numbers are “subject to our ability to secure and maintain sufficient premium rates,” according to a transcript of the call from Thomson Reuters. The premium increases the company asked for in California are on hold while the regulator there reviews its filings.

    The other elephant in the room: The health overhaul. DeVeydt said his company’s forecast doesn’t include the impact of changes in the health system. If the overhaul passes, most provisions of the legislation that would hurt an insurer’s ability to hit its marks with Wall Street wouldn’t take effect right away, so this forecast seems pretty secure in that regard.

    One more thing the Health Blog noted with interest. As of the first of this year, WellPoint decided to change the way it reports its benefit expense ratio, also called the medical loss ratio. The MLR is a metric closely watched by Wall Street and Washington as a gauge of how much companies spend on medical treatments versus administrative expenses and overhead.

    DeVeydt said that WellPoint is now reclassifying things like nurse hotlines and wellness programs for members as medical — rather than administrative — expenses. That boosts the MLR that the company expects this year to 84.3% from the 82.9% reported in 2009.

    What’s interesting about the reclassification is that the bill the Senate passed Christmas Eve and that is being considered by the House would mandate that companies hit a 85% MLR for group business and an 80% MLR for individual business. It’s a lot easier to make those targets if expenses currently considered administrative are moved into the medical column.

    Image; iStockphoto


  • Putting a Dollar Figure on a Doctor’s Worth to a Hospital

    docWhat’s a doctor worth to a hospital in terms of annual revenue? And what specialties average the most and the least in hospital revenue generation?

    The answer to the first question averages about $1.54 million a year, based on 114 U.S. hospital responding to a survey by physician recruiters Merritt Hawkins. That’s up slightly from the $1.5 million a year per doc that hospitals averaged in revenue in 2007, the last time the recruiting outfit took the survey. (Revenue here means net inpatient and outpatient dollars derived from referrals, tests and procedures done in the hospital.)

    Merritt Hawkins also asked about revenue generation in the last 12 months by 17 doctor specialties. Not all 114 hospitals replied for all specialists but below are the averages for the responses received. Also included is a list of average annual salaries that came from other Merritt Hawkins data:

    Hospital Annual Revenue per Doctor by Specialty

    Specialty Avg. Revenue Avg. Salary
    Neurosurgery $2,815,650 $571,000
    Cardiology/Invasive $2,240,366 $475,000
    Orthopedic Surgery $2,117,764 $481,000
    General Surgery $2,112,492 $321,000
    Internal Medicine $1,678,341 $186,000
    Family Practice $1,622,832 $173,000
    Hematology/Oncology $1,485,627 $335,000
    Gastroenterology $1,450,540 $393,000
    Urology $1,382,704 $401,000
    OB/GYN $1,364,131 $266,000
    Cardiology/Non-Invasive $1,319,658 $419,000
    Psychiatry $1,290,104 $200,000
    Pulmonology $1,204,919 $293,000
    Neurology $907,317 $258,000
    Pediatrics $856,154 $171,000
    Ophthalmology $842,711 $282,000
    Nephrology $696,888 $240,000

    “The most powerful tool in healthcare remains the physician’s pen,” President Mark Smith of Merritt Hawkins, a unit of AMN Healthcare, said in a statement with the survey. “Patients are not admitted to the hospital or discharged, tests ordered, or procedures performed without a physician’s signature.”

    Image: iStockphoto


  • Health Bill: From Reconciliation to ‘Deeming’

    This post by WSJ’s Naftali Bendavid also appears on the Washington Wire blog.

    logoWe’re not doing anything wrong. And besides, the Republicans did it more.

    That was much of House Majority Leader Steny Hoyer’s message today as he struck back at critics of the legislative tactics Democrats are using to push through their health overhaul bill. Dismissing the criticism as an inside-the-Beltway fixation, Hoyer said the American public cares about what’s in a bill, not the process by which it passes.

    “ ‘So what?’ says the American public,” Hoyer, a Maryland Democrat, told reporters. “What they’re interested in is what resulted. ‘What did you do for me and my family to make my life more secure?’ ”

    Republicans have been complaining loudly about the legislative process used by the Democrats as they struggle to push their health overhaul over the finish line. In particular, GOP leaders have criticized the planned use of “reconciliation,” a provision that allows the Senate to pass a bill with a simple majority of 51, rather than the 60 usually required for controversial bill.

    More recently, they have also challenged Democrats for considering a tactic under which the House would “deem,” or declare, the Senate version of the health bill passed, even as it makes changes to it. Under this plan, House members wouldn’t hold a separate, independent vote on the Senate bill, which many of them dislike.

    Rep. Eric Cantor, a Virginia Republican, said on the floor today that the House should “take an up-or-down vote on the Senate bill” rather than “ram this bill through without a direct vote.” “The majority seems committed to trying to muscle through a trillion-dollar overhaul that will change health care for every man, woman, and child,” said Cantor, the second-ranking House Republican

    But Hoyer said Republicans, when they held power, repeatedly used the same processes they are now decrying. “That, I think, is hypocritical at best,” he said.

    Democrats circulated background material showing that deeming was first used in 1933 and, since then, has been used more often by Republicans than Democrats. Republicans respond that these tactics have never been used for bills as sweeping as the health care overhaul.

    Hoyer said Democrats are contemplating the moves only because Republicans are using Senate rules to thwart the majority’s will.

    “The Republicans have been yelling about process,” he said. But “this bill has received more careful consideration, more exposure, more transparency, more debate, more hearing time, more debate time, more amendments offered than almost any bill I can think of in my time in the Congress of the United States.”

    Besides, Hoyer added, House members will vote on whether to approve the Senate bill, even if it’s by deeming it passed as they make changes to it. “Does anybody in this room doubt that you have to vote on that?” he said. “We will vote on it, in one form or another.”


  • AstraZeneca Maps ‘Selective’ Expansion in Emerging Markets

    astrazenecaAstraZeneca lifted the veil a bit today on its plans to become a bigger player in emerging markets, saying sales in those those countries will double to account for about a quarter of the British company’s total revenue by 2014.

    Branded generics will be a part of its push, the company said, but they will only account for 10% to 15% of its emerging-market sales by 2014. Because it isn’t willing to take a big hit on pricing, AstraZeneca said it would be “very selective” in branded generics, targeting around 100 medicines for sale in 30 markets where it can achieve favorable margins.

    The company cited forecasts that emerging markets are expected to contribute around 70% of pharma-industry growth in the next five years, with branded generics accounting for a large chunk of that expansion. AstraZeneca last week announced generic supply deal for emerging markets with India’s Torrent Pharmaceuticals. Terms weren’t disclosed.

    Of course, other companies including, Pfizer, GlaxoSmithKline and Eli Lilly also have their sights set on emerging markets and on branded generics in particular. Indeed, Reuters notes that while AstraZeneca is shooting for a quarter of its sales coming from emerging markets, European rivals such as Sanofi-Aventis, Novartis and Bayer are there already.

    Here’s more from Dow Jones Newswires.

    Photo: AstraZeneca


  • Fred Hassan Finds New Perch

    hassanWe’ve been wondering for more than a year whether pharma mainstay Fred Hassan would become a CEO again following the sale of Schering-Plough to Merck. Now we know.

    The former Schering-Plough CEO was named chairman of eye-care company Bausch & Lomb, whose board he had joined in November. Another Schering-Pough veteran, Brent Saunders, who headed Schering-Plough’s consumer health-care unit, also is joining Bausch & Lomb as CEO. Read their bios here.

    Hassan has left a trail of deals behind him. As CEO of Pharmacia, he engineered that company’s merger with Monsanto and later spun off Monsanto’s agricultural business before selling Pharmacia to Pfizer. With those companies and as head of industry group PhRMA (see here, here and here), Hassan never shied away from attention.

    Bausch & Lomb has been majority owned by private-equity firm Warburg Pincus since 2007. Reuters notes that following Schering-Plough’s takeover by Merck last year, Hassan became a senior adviser to Warburg Pincus.

    The company is still trying to fully recover from a contact-solution recall in 2006 after links to fusarium keratitis, a rare fungal eye infection, were found. The company continues to fight lawsuits over the matter. Current Bausch & Lomb Chairman and CEO Gerald Ostrov is retiring.

    Photo: Associated Press


  • We Might Remember These as the ‘Good Times’ in Health Care

    ballThe number of Americans without health insurance could rise to almost 60 million by 2015 from 49 million today if nothing is done to overhaul the health-care system, a new forecast says.

    The uninsured could reach more than 67 million in 10 years, according to the Robert Wood Johnson Foundation, which paid for the study conducted by the Urban Institute. Read the study and related data here.

    The numbers above are what’s seen under the worse-case scenario (continuing high jobless rates, slow income growth, high health-cost growth). But you’d have to be pretty optimistic about the world to expect the best-case scenario (full employment, etc.).

    No matter which forecast they looked at, the researchers said the middle class would suffer most without reform. Those employers continuing to offer health insurance benefits would pass on more costs to workers while individuals and families would pay more in out of pocket for premiums and health services.

    And despite covering fewer workers, employer would see spending on premiums almost double to $851 billion in 2020 under the worst-case outlook, according to the projections.

    “The bottom line is that we are likely to see a significant deterioration in who has health insurance coverage in this country, coupled with untenable increases in private and public spending,” an Urban Institute researcher said.

    Image: iStockphoto