Health Law

The AP (12/1, Freking) reports, "Federal health officials estimate that the struggling economy will speed up by one to three years the exhaustion of the Medicare trust fund covering hospital and nursing home care." Medicare's trustees "warned last March that the trust fund for Medicare Part A would become insolvent in 2019. But the chief actuary for Medicare," Richard Foster, "said Monday the economy will likely generate less revenue through payroll taxes than the trustees had projected." Department of Health and Human Services Secretary Mike Leavitt "said that Foster's update reinforced his concern that too many people view Medicare's finances as one that is in the distant future." Leavitt said, "We're not talking about some future president. We may be talking about this one." In the last year, according to the AP, "Leavitt has frequently talked about Medicare drifting toward a financial disaster. He said Congress will be forced to take action by raising taxes, cutting benefits to seniors or reducing payment rates for healthcare providers."

CQ (12/2, Schatz, Hooper) reports that state governors "went to Capitol Hill on Monday to make a pitch for more than $156 billion in additional Medicaid funding and infrastructure spending as part of an economic stimulus package. Govs. Edward G. Rendell (D-PA) and Jim Douglas (R-VT), leaders of the National Governors Association, met with Speaker Nancy Pelosi (D-CA) and George Miller (D-CA.)," who chairs the House Education and Labor Committee, "to discuss the stimulus legislation that Congress is preparing for early next year." President-elect Barack Obama and Vice President-Elect Joseph R. Biden Jr. "will be meeting with the governors" today in Philadelphia "to hear their pitch for help." House Democrats "have scheduled a daylong forum on Dec. 9 to review economic stimulus proposals."

        A second article in CQ (12/2, Reichard) adds that the governors "stopped short Monday of specifying how much added federal Medicaid spending should be included in a massive new economic stimulus package to be taken up by the 111th Congress, other than to say it should exceed the sum states received in 2003 tax legislation." The 2003 measure, PL 108-27, provided "$10 billion in added federal Medicaid spending and $10 billion for a general relief fund for government services. Medicaid money in the upcoming package should be 'north of that,' Gov. Jim Douglas (R-VT) told a press conference Monday."

Modern Healthcare (12/1, Rhea) reported, "FujiFilm Medical Systems, Stamford, Conn., has acquired the radiology-information technology company Empiric Systems, Morrisville, N.C., according to a news release." Under the agreement, FujiFilm will acquire Empiric as "a wholly owned subsidiary." The acquisition is expected to "further FujiFilm's expansion into medical-imaging and health-information technology," company officials said. "The financial terms of the deal have not been disclosed."

In a letter to the editor of the Wall Street Journal (12/2), Sen. Max Baucus (D-MT) responds to a recent Journal editorial on healthcare reform. Baucus writes, "The Health Insurance Exchange envisioned in my reform will not involve oppressive regulation, but will simply preclude insurers from discriminating against those who are sick. It will require affordability, but premiums will not be set. It will require a minimum level of benefits, but Congress will not prescribe specific packages or even require insurers to participate." Baucus says his plan "specifically says a public option must offer benefits similar to private plans in the Exchange. Nor does the Baucus plan import Medicare's price rules into the public option. Rates would be determined by balancing the goals of increased competition and affordable access to quality healthcare."

In the Wall Street Journal (12/1) Health Blog, Scott Hensley recaps previous Chicago Tribune and LATimes articles on the prospects of cheaper prescription drugs and universal health coverage under an Obama Administration. Hensley says that some of Big Pharma's "worst fears could become reality under the Obama administration." Among the changes to look for: "Legalization of the importation of cheaper prescription medicines, legislation clearing the way for generic versions of biotech drugs and direct price negotiations between Medicare and drugmakers."

AHN (12/1, Young) reported that President Bush may "introduce a new rule that will make it easier for doctors, nurses, pharmacists, and other healthcare workers to refuse to participate in any medical procedure they view as morally 'objectionable.'" In the past, "health workers have already been able to refuse to participate in abortions," but the new rule would allow them to "refuse to participate in such things as providing birth control...and in assisting with artificial insemination." The rule would also "apply to any medical facility and healthcare workers that received federal funds." Among the rule's opponents are "the National Association of Chain Drug Stores, the American Hospital Association, the American Medical Association, 28 senators, more than 110 representatives and the attorneys general of 13 states." They fear that "it could result in patients on Medicaid being turned away from pharmacies when they try to fill birth control prescriptions." They also contend that "the proposed regulation could result in some victims of violent rape being unable to obtain emergency contraception at the hospital emergency rooms."

The Boston Globe (12/1, Wangsness) reported that "some Congressional Democrats in charge of health reform are talking about" taxing healthcare benefits. While Sen. John McCain (R-AZ) "wanted to end the tax exclusion entirely for employer-sponsored insurance," these Democratic lawmakers would limit employee exclusions, "so that those with higher incomes or more generous health benefits might pay taxes on some portion of the income they use to pay for their health premiums." In doing so, they would also limit government expenditures on "more than $300 billion a year in potential tax revenues...one of the few large pools of cash available to help fund a major health reform package." In fact, Sen. Max Baucus' (D-MT) "health policy paper that many see as an important Democratic blueprint for health reform...raises the possibility of capping tax breaks for health insurance premiums." Still, some unions "are wary of any changes since employers provide insurance to the vast majority of their members," and "business groups are...extremely cautious."

The Sacramento Bee (12/1, Smith) reports that the California state Senate "swore in a new leader, Sacramento Democratic Sen. Darrell Steinberg, who promised to improve the Legislature's flagging public image." In his acceptance speech, Steinberg emphasized that "lawmakers should enact universal children's heath care" and pass bills "to implement already approved bond measures." He also "urged lawmakers to reach quick agreement on mid-year budget solutions." According to a Los Angeles Time (11/30, Rau) report, Steinberg said he hopes to expand health insurance for children by "early next year."

USA Today (12/1, Sternberg) reports that Hurricane Ike has turned the nation's top-ranked trauma center -- the University of Texas Medical Branch's John Sealy Hospital -- "into a doc-in-the-box." The hospital "typically handled more than 60,000 emergencies and 3,000 trauma operations a year from communities along the Gulf Coast," but now it must transfer injured patients elsewhere. For weeks, construction crews "battled back, laboring to pump out ghostly hallways, eliminate mold and make repairs," but last Monday the university regents "finished a series of 2,500 layoffs throughout the UTMB system," most of which affected John Sealy's 4,500 doctors and staff. The hospital "may never be the same. It began reopening gradually last week and put a dozen or so beds into service. But tests revealed mold spores wafting into four of six operating rooms, postponing their use indefinitely."

Modern Healthcare (12/2, Evans) reports, "The Pennsylvania Health Department halted admissions to the Commonwealth Medical Center, Aliquippa, Pa., and demanded financial records for the struggling, privately owned hospital." A spokeswoman for the Health Department said that the state's move comes after "numerous complaints that the 208-bed hospital lacked supplies and equipment." On Nov. 25, "state inspectors confirmed that the medical center did not have necessary supplies for some blood tests, and health officials banned outpatient, emergency and inpatient admissions." The spokeswoman added that the ban is expected to remain "in place until all" information regarding financial stability and sustainability "is received and the hospital submits an acceptable plan to fix problems."

The AP (12/1, Martin) reported that Michigan Attorney General Mike Cox and Blue Cross Blue Shield of Michigan "continued their high-profile fight Monday over legislation the health insurer wants approved by the end of the year." Both the "Democrat-controlled state House and the Republican-led state Senate have passed different versions of related legislation" and have yet to approve a compromise. The legislation would remove "some of the attorney general's oversight of the nonprofit's rate increases but could toughen requirements for other companies." It would also "force competitors to help cover losses on the individual market through either a high risk pool or an assessment."

        On Monday, Blue Cross "gave the state's attorney general more than 300 pages of financial information that it says show why the individual health insurance market needs reforming," the Kalamazoo Gazette (12/2, Nixon) adds. Cox requested "a detailed explanation for why the changes are needed" last month. Blue Cross officials defend the legislative changes, arguing that "more people are buying individual health insurance policies because they have lost their jobs or because their employers have cut or decreased coverage." The company "said it expects to lose $166 million on its individual-policy business this year and another $264 million next year," as "for-profit health insurers 'cherry-pick' young healthy people, leaving it with more expensive older and sicker people." Meanwhile, Cox contends that "the proposals would allow [Blue Cross] to dramatically raise health insurance rates with little to no oversight by the state."

AMNews (12/8, Berry) reports that "opponents of the for-profit conversion" want New Jersey regulators "to ask for a new application from the plan that takes into account the failing economy since the plan's application in August.." Specifically, the "Medical Society of New Jersey, the Alliance for Advancing Nonprofit Health Care, and QualCare, a New Jersey-based hospital and physician-owned nonprofit health plan, wrote a letter to the director of the New Jersey Dept. of Banking and Insurance and the state attorney general, calling for Horizon to withdraw its application or for the state to require a new one." The groups argue that Horizon's for-profit "application should be amended to reflect the changes to the economy that have sent stocks plummeting and frozen the credit market." Horizon spokesperson "Tom Rubino said he hadn't seen the letter, but the economic crisis has done nothing to change Horizon's reasons for wanting to convert and has heightened the need for the economic benefit to the state that Horizon expects."

The Wall Street Journal (12/1) editorialized that although "much good has resulted since Illinois lawmakers joined 35 other states and placed limits on medical damage awards three years ago," a case before the Illinois Supreme Court may reverse those trends. Medical malpractice "jury awards for pain and suffering" were capped "at $500,000 against doctors and $1 million against hospitals" in 2005 with the Medical Malpractice Reform Act. But, the law was "challenged...almost immediately" by plaintiffs' lawyers who argued that it "violates separation-of-powers principles because it strips judges of the ability to police excessive verdicts." The Journal explained, however, that Illinois legislatures "have always been able to alter common-law remedies, whether in the form of changing statutes of limitations or burdens of proof." Furthermore, "without such a deterrent to frivolous suits, limiting damage awards is the only way to stop jackpot judgments that drive doctors away and hurt the quality of medical care." The Journal concludes, "The Illinois Supreme Court" should "side with patients and the rule of law."

On the front page of its Science Times section, the New York Times (12/2, D1, Tarkan) reports that several surveys indicate that "hospital staff members...blame badly behaved doctors for low morale, stress, and high turnover." In addition, "recent studies suggest that such behavior contributes to medical mistakes, preventable complications, and even death." For instance, a poll "of healthcare workers at 102 nonprofit hospitals from 2004 to 2007 found that 67 percent of respondents said they thought there was a link between disruptive behavior and medical mistakes, and 18 percent said they knew of a mistake that occurred because of an obnoxious doctor." Still, "physicians and nurses say they have seen less of it in the past five or 10 years, though it is still a major problem, and the Joint Commission is requiring hospitals to have a written code of conduct, and a process for enforcing it."

Life Sciences Law

Bloomberg News (12/2, Larkin, Decker) reports that Israel's Teva Pharmaceutical Industries, Ltd. "turned itself into the world's biggest maker of generic medicines through a high-risk strategy of flouting drug patents." Teva "risks paying billions of dollars in legal damages by...selling copies while patents on a drug are still being disputed in court." The company "bets it will win the court case, allowing it to avoid triple damages for violating valid patents on brand-name drugs." Since 2004, Teva "has pulled off the maneuver 13 times...helping double annual revenue to $9.41 billion." Now, "its next target may be Eli Lilly & Co.'s Evista (raloxifene)." For its part, "Lilly said it would fight any patent infringement." The case is Eli Lilly & Co. v. Teva Pharmaceuticals USA Inc., 06cv1017, U.S. District Court for the Southern District of Indiana (Indianapolis).

MedPage Today (12/1, Gever) reported that, according to preliminary report resulting from a European Union (EU) investigation, "through manipulations of the patent and legal systems in Europe, research-based pharmaceutical companies succeeded in delaying the introduction of generic drugs, increasing the overall expense of medications by three billion euros ($3.8 billion)." In its report, which examined "219 different chemical entities sold in Europe in 2000 to 2007, including the 50 best-selling drugs and agents scheduled to go off-patent during that interval," the European Commission, "the EU's executive arm," revealed that "firms forestall generic competition" by "patent clustering," as well as "defensive patenting," filing "patent infringement litigation against generic companies that seek to market generic equivalents," and making "patent settlements with generic companies that limit competition."

Writing in the Wall Street Journal (12/1) Health Blog, Victoria Knight observed, "As the number of clinical trials conducted by western drugmakers in developing nations rises, so is the attention being paid to how they're being run." Recent problems in India and Poland "bring to the fore longstanding concerns over whether medical and ethical practices are being adhered to in developing countries, according to" a recent Wall Street Journal article. Pharmaceutical companies find "overseas trials attractive," because of "lower costs, faster recruitment, and patients who are less likely to take other medications that can interfere with study results." But, according to critics, "corners can also be cut. Investigators may be too eager to please," and patients may assume "extra risks." Currently, approximately "40 percent or more of trials are taking place in the developing world."