Issues & Legislative Committee Report

July 13, 2006

Gainsharing/JCAHO Update

How Gainsharing Can Impact Orthopedics: The Provider Perspective

An excerpt from the full Gainsharing report indicates that orthopedic device manufacturers worry that Gainsharing will push their customers to reduce the use of innovative and high-priced implants in favor of older, less expensive implants. The assumption is that higher volume hospitals are already getting best pricing, so the surgeons can only change the mix of devices they use, and switch to less expensive and/or less innovative devices.

In that case, we might see a significant supply cost savings from a high-volume surgeon at a large tertiary-care hospital that moves from a 70/30 high demand to low demand ratio, to 50/50. Estimates indicate that a change such as this would result in Gainsharing to a physician of an amount less than 10% of current income. The report indicates that many human resource professionals believe it takes a 15% change in income to change people’s behavior.

Because physicians commonly believe they currently choose products that are medically appropriate, surgeons may not significantly reduce the use of more expensive cementless stems for clinical reasons − despite the abovementioned data-driven conclusion suggested by Joane Goodroe. So it is unlikely that there would be much product substitution.

“HealthpointCapital believes that device manufacturers should not be too concerned about Gainsharing-driven mix shift. Product choice is driven by the physician, primarily for clinical reasons and secondarily out of personal preference. Those two factors are unlikely to be subordinated to price concerns.”

Hospitals with lower volumes may consolidate vendors, with the intention of getting price breaks from large implant companies. However, physicians who work at lower volumes are typically already standardized on one vendor, and have even greater dependence on the sales rep's assistance. It's unlikely that total joint replacements done in low-volume settings will be affected by Gainsharing.

This report indicates that HCA is using its size to get price concessions in return for guiding their business to just three vendors: Depuy, Zimmer, and Stryker, then guiding physicians to comply by Gainsharing of sorts. “The HCA program has not yet been reviewed by the OIG, and while technically Gainsharing, it is meaningfully different from the currently approved Gainsharing format. Although 20% of cost savings are shared with physicians, it is not a part of a larger Gainsharing program and physicians are rewarded individually not as a group. HCA is just forcing a volume contract on its surgeons.” Purchase a complete copy of the Gainsharing report

Source: Orthopedic Network News, HealthpointCapital

JCAHO − Flu Shots

Effective January 1, 2007, a new infection control standard requires hospitals, critical access hospitals, and long-term care facilities to offer influenza vaccinations to staff, including volunteers and licensed independent practitioners. Only about 35% of healthcare workers are vaccinated each year, yet there are more than 200,000 hospitalizations annually in the U.S. A number of professional societies and special interest groups support the vaccination of healthcare workers against influenza, and the Centers for Disease Control and Prevention recommends annual influenza vaccination for healthcare workers who have close patient contact.

2007 National Patient Safety Goals

The 2007 National Patient Safety Goals (NPSGs) have been announced. Major changes in this fifth annual issuance of NPSGs include extension of a Requirement that accredited organizations define and communicate the means for patients and their families to report concerns about safety, across all Joint Commission accreditation and certification programs. In addition, a new Requirement specifies that behavioral healthcare organizations, as well as psychiatric hospitals and patients being treated for emotional or behavioral disorders in general acute-care hospitals identify patients at risk for suicide. Finally, new language in one of the two Requirements under the existing medication reconciliation Goal stipulates that a complete list of current medications be provided to the patient on discharge from care.

Source: www.JCAHO.com

Disaster Preparedness Issue – Funding

IOM: No Reliable Way to Safely Reuse Masks in a Flu Pandemic

There is currently no simple, reliable way to decontaminate disposable respirators or medical masks to enable people to safely reuse them in a flu pandemic, the Institute of Medicine concludes in new report. The Department of Health and Human Services requested the study given predictions the devices will be in short supply if a pandemic strikes soon. Neither N95 respirators nor other forms of face coverings have been tested for their ability to protect against flu viruses specifically, the IOM panel stressed. In its pandemic flu plan, HHS recommends healthcare workers employ the same infection control practices for pandemic flu as for other human flu viruses. Those precautions include wearing a surgical or procedure mask when caring for flu patients, and an N95 respirator only when performing procedures that may generate increased small-particle aerosols of respiratory secretions.

In the event of an influenza pandemic, public health officials will need to resort to multiple measures to reduce the impact. If effective vaccines and anti-viral medications do not exist or are not available in adequate quantities during a pandemic situation, respirators and medical masks could help prevent or slow influenza transmission.

Based on the assumption that efforts to produce and stockpile sufficient supplies of disposable masks and/or respirators may fall short in the event of a pandemic, the US Department of Health and Human Services requested that an IOM committee examine issues relative to the potential reuse of medical masks and N95 respirators in the event of an influenza pandemic. 

Over the course of three months, the committee held two meetings, requested information from manufacturers, and read a wide body of technical literature. The committee’s work ascertained that very little is currently known regarding the potential to disinfect and reuse either medical masks or respirators. Fundamental research both in the epidemiology of influenza and in the material properties of medical masks and respirators is needed before methods of disinfection and reuse can be developed. 

In spite of that lack of research, the committee, in its expert opinion, was able to develop a method of use that may allow for extended use of an N95 respirator. This recommendation is outlined in greater detail in the committee’s report. 

Source: www.ahanews.com, April 27, 2006.

HHS Announces Additional $225 Million for State and Local Pandemic Influenza Preparedness Efforts

As part of President Bush’s plan to mobilize the nation and prepare for an influenza pandemic, HHS Secretary Michael Leavitt today announced an additional $225 million in funding for state and local preparedness.

“Earlier this year HHS joined the nation’s governors for a series of state pandemic influenza summits,” Secretary Leavitt said. “These funds will build on the work begun at the summits and help local, tribal, territorial and state public health officials as they undertake critical preparedness planning that communities must do themselves.”

Today’s funding announcement is part of $350 million included in recent emergency appropriations for upgrading state and local pandemic influenza preparedness passed by Congress in December. In February, the first phase of $100 million was awarded to states for planning and exercising of pandemic response plans and to identify gaps in preparedness.

This second phase of funding is being awarded to begin addressing those identified gaps in pandemic influenza preparedness planning. The grants will be awarded to all 50 states, the District of Columbia, three local jurisdictions (New York City, Chicago and Los Angeles County), five U.S. Territories and three Freely Associated States of the Pacific.

A table, outlining what funds will be available for eligible jurisdictions, is available at http://www.pandemicflu.gov/news/allocation.html. For more information on pandemic influenza preparedness efforts, go to www.pandemicflu.gov.

HHS Announces $1.2 Billion in Funding to States for Bioterrorism Preparedness

HHS Secretary Mike Leavitt today announced that the department has made available another $1.2 billion to the states, territories and four metropolitan areas to help strengthen their capacity to respond to terrorism and other public health emergencies.

“Improving our nation’s response to public health emergencies is an important part of securing America,” Secretary Leavitt said. “All emergency incidents − whether naturally occurring, accidental, or terrorist-induced − begin as local matters and with this program, states and communities will build on the preparedness gains they’ve made over the past four years.”

The funds will be used to improve infectious disease surveillance and investigation, enhance the preparedness of hospitals and the healthcare system to deal with large numbers of casualties, expand public health laboratory and communications capacities and improve connectivity between hospitals, and city, local and state health departments to enhance disease reporting. The funds will also be used to exercise existing response plans, test capabilities and evaluate improvements. These emergency preparedness and response efforts are intended to support the National Response Plan and the interim National Preparedness Goal.

The HHS funding is awarded via two separate but interrelated cooperative agreements. HHS' Centers for Disease Control and Prevention (CDC) is providing $766 million to develop emergency-ready public health departments by upgrading, improving, and sustaining their preparedness and response capabilities for “all-hazards” public health emergencies, including terrorism and other naturally-occurring public health emergencies.

Included in the CDC awards is targeted funding to expand the Cities Readiness Initiative (CRI) from 36 metropolitan areas to 72 metropolitan areas representing all 50 states. Tables are included with the release with a listing of all metropolitan areas expected to participate in CRI this year.

The goal of CRI is to ensure the selected cities are prepared to provide oral medications during a public health emergency to 100 percent of their affected populations. This entails enhancing each city’s dispensing plans with trained staff and developing and testing plans that include alternative means of delivery. Known as mass prophylaxis, this effort is considered the top public health priority identified in the National Preparedness Goal.

Also included in CDC’s $766.4 million is $5.4 million for the Early Warning Infectious Disease Surveillance program specifically for states bordering Canada and Mexico (including the Great Lakes States) for the development and implementation of a program to provide effective detection, investigation and reporting of urgent infectious disease cases in the shared border regions of the three nations. States included in this program are Alaska, Arizona, California, Idaho, Indiana, Illinois, Maine, Michigan, Minnesota, Montana, New Hampshire, New Mexico, New York, North Dakota, Ohio, Pennsylvania, Texas, Vermont, Washington and Wisconsin.

HHS’ Health Resources and Services Administration (HRSA) is providing $460 million for states to develop medical surge capacity and capability to deal with mass casualty events. This includes the expansion of hospital beds, development of isolation capacity, identifying additional healthcare personnel, establishing hospital-based pharmaceutical caches, and providing mental health services, trauma and burn care, communications and personal protective equipment. Hospitals and other healthcare providers play a critical role in both identifying and responding to any potential terrorism attack or infectious disease outbreak.

Over the past four years, HRSA’s Bioterrorism Hospital Preparedness Program has awarded funds to build the capacity of hospitals and other healthcare institutions to deal with large numbers of casualties. This year, the program will focus on improving the capability of local and regional healthcare systems to manage mass casualty events.

Hospitals Could Save Nearly $5 Billion through GPO Reform, Study Shows

June 20, 2006 − According to a new report released during MDMA’s recent 12th Annual Meeting, the nation’s hospitals collectively could save nearly five billion dollars if hospital Group Purchasing Organizations (GPOs) lost their safe harbor protection under the Medicare anti-kickback statute. Hal Singer, Ph.D., president of the economic consulting firm Criterion Economics, developed the study. He told MDMA that if GPOs – which purport to save the  healthcare system money through volume purchasing on behalf of groups of hospitals – no longer were permitted to collect fees from dominant suppliers in exchange for market exclusivity, Medicare could save
$2.5 billion annually.

The safe harbor, which was enacted by Congress in the 1980s, exempts GPOs from criminal penalties for accepting kickbacks from healthcare suppliers. The Senate Judiciary Antitrust Subcommittee has been investigating allegations of anticompetitive conduct and conflicts of interest by GPOs and is contemplating legislation, including repeal of the safe harbor. MDMA Executive Director Mark Leahey commented,
“The study demonstrates that GPOs cannot serve two masters. If the GPOs are to save money for hospitals and the healthcare system, and help assure delivery of
high quality medical technologies to patients, they cannot be compensated by
their suppliers.”

Source: http://www.medicaldevices.org/public/

Ethics/Pharmaceutical and Vendor Gifts

The United Press recently reported on a study done by the American Medical Association (JAMA, May 17, 2006) that more than 67% of cardiovascular trials for new drug treatments done between 2000 and 2005 that were funded by for profit groups yielded favorable results, as compared to 49% of trials funded by non-profit groups. This raises the real concern that physician objectivity may be influenced by financial ties. This may also be influenced by the fact that for profit groups are less likely to fund a trial whose initial reports are negative or null. If the initial findings are positive, then for profit organizations are more likely to get involved.

From a governmental oversight perspective, the American Society of Health-System Pharmacists (ASHP) reports on another study done by the American Medical Society (Journal of the American Medical Society, April 25, 2006) which delved into the relationships held by scientific experts sitting on FDA panels with pharmaceutical firms. Researchers found that of the 73% of advisory panels studied, only 28% of panelists disclosed any conflicts, and of that number, only 1% was reused from voting. The panelists are required by law to be free of conflicts of interest in terms of the products they discuss, but this requirement can be waived if the FDA determines that the panelist’s participation is necessary. This conflict of interest waiver seemed to have a influenced the decision to keep Vioxx on the market.

On May 10th, “The New York Times” published an article describing the attempts of the Cleveland Clinic to deal with conflicts of interest between the organization and its physicians. As a leading medical research facility, it is challenged by the close ties that the device and drug manufacturers may have with its physician base. In some cases, there are financial ties between the physicians and the vendor which may influence both the medical care provided and the outcome of the research being done. The Board of Trustees has established a board committee to examine relationships between physicians and any other Clinic employee with industry that might provide a bias in research or patient care. Although potential conflict of interest issues are being uncovered, these will not be made public. However, the physicians involved will not be given opportunities to influence purchasing decisions. The Clinic has decided to begin a review of its informed consents to determine the need for patient awareness of potential conflicts.

Close physician relationships with drug vendors are a double-edged sword. Recently, physicians have become concerned with the extensive data bases that pharmaceutical manufacturers keep on physician ordering practices. The sale of prescription records is widespread, as data is garnered through contracts with retail pharmacies and insurer information. This data is married with a database that the AMA keeps on over one million physicians practicing in the US and sells to data companies. From the two data bases, physician profiles are developed. Sales reps can use this data to pressure physicians into ordering medications they might not ordinarily order. They can also target certain physicians for incentives and other perks that the drug companies can offer. Physicians currently cannot prevent their data from being compiled and sold to drug companies, but the AMA is giving them the option of indicating that they do not want this data shared with sales representatives. 

Sources:
(1) Abelson, Reed: “Cleveland Clinic Moves to Fight Conflicts of Interest”, The New York Times: May 10, 2006.
(2) Gilcrest, Laura: “Profit-backed Trials Favor Newer Drugs”, UPI.com: May 16, 2006.
(3) Saul, Stephanie, “Doctors Object to Gathering of Drug Data”, The New York TImes: May 4, 2006.
(4) Young, Donna, “FDA Advisers with Conflicts Rarely Banned from Voting”, ASHP News: May 2, 2006.