| ACCESS, QUALITY & COST |
HEALTH CARE SPENDING: Slower Health Care Spending Growth Largely Attributed to Weak Economy, Not Permanent Changes, Study Finds
Story Highlights:
*The recession and the slow recovery from it are the major forces driving a slowdown in health care spending, while higher patient cost-sharing and other changes to the health system play a smaller role, according to a study released yesterday by the Kaiser Family Foundation and the Altarum Institute.
* U.S. health spending grew on average by 4.2% annually from 2008 to 2012, down from a recent peak of 8.8% annually between 2001 and 2003.
* The study authors noted that although the effects of the recession will continue to slow health care spending for several more years, the economy eventually will recover, pushing the annual health spending growth rate back to more than 7%.
The recession and the slow recovery from it are the major driving forces behind a recent slowdown in health care spending, while higher patient cost-sharing and other changes to the health system play a smaller role, according to a study released Monday by the Kaiser Family Foundation and the Altarum Institute, The Hill's "Healthwatch" reports (Viebeck, "Healthwatch," The Hill, 4/22).
For the study, analysts developed a model that tracked health care cost growth using economic indicators over the past 50 years to predict future growth rates for health care spending (Kliff, "Wonkblog," Washington Post, 4/22). The study was prepared by Larry Levitt, senior vice president of KFF, along with KFF's Gary Claxton, Charles Roehrig of Altarum Institute and Thomas Getzen of the Fox School of Business at Temple University.
The study found that health care spending totaled about $2.8 trillion in 2012 and grew on average by 4.2% annually from 2008 to 2012, down from a recent peak of 8.8% annually between 2001 and 2003 (Reichard, CQ HealthBeat, 4/22).
The study showed that the recession and poor economic recovery accounted for 77% of the factors that contributed to the recent slowdown in national health care spending, while just 23% resulted from changes in the health care system, such as higher deductibles and other cost-sharing strategies made by insurers and medical providers (Terhune, "Money & Co.," Los Angles Times, 4/22).
Although the effects of the recession that ended in 2009 will continue to lower health care spending for several more years, the economy eventually will recover, pushing the annual health spending growth rate to more than 7%, the report found (CQ HealthBeat, 4/22).
In regard to the Affordable Care Act, the study said the law likely will produce a one-time increase in health care spending in 2014 when millions of uninsured individuals gain health coverage (Los Angeles Times, 4/22). However, it noted that several provisions -- such as the law's delivery-system reforms, its tax on high-cost health plans and its Medicare savings -- are designed to lower spending ("Healthwatch," The Hill, 4/23).
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| KFF Officials Comment, Economists React to Study |
In a Washington Post opinion piece, Levitt and KFF President and CEO Drew Altman noted that increased efforts to curb health care spending could lower the spending growth rate by a percentage point, saving about $2 trillion over a decade. They added, "We need to be realistic about the fact that health spending will start going up more rapidly again as the economy improves," adding that individuals need to start "recognizing that the problem of health care costs is far from solved."
Meanwhile, some health economists were skeptical of the findings.
Jonathan Skinner, an economist and health policy expert at Dartmouth College, said that it is too soon to determine whether the slowdown in spending will last, but he added that "the results of this survey could suggest more caution in interpreting the slowdown as permanent."
Meanwhile, Paul Ginsburg, an economist and president of the Center for Studying Health System Change, said it also is too soon to tell if recent initiatives by health care providers, insurers and policymakers to curb health spending -- including new payment models such as accountable care organizations and bundled payments -- have been successful (Evans, Modern Healthcare, 4/22).
-- compiled by Heather Drost |
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| IN THE COURTS |
TOBACCO: Supreme Court Declines To Hear Case on FDA Regulatory Power Over Tobacco Marketing
Story Highlights:
* The Supreme Court on Monday declined to hear a case by the tobacco industry challenging a federal law that expanded rules on how tobacco products can be marketed, including requiring packages to have graphic warning labels.
* The Supreme Court justices let stand a lower court decision upholding the law without comment.
* Following the announcement, FDA said it will move forward with the new rules immediately but did not set a timeline for the process.
The Supreme Court on Monday declined to hear a case by the tobacco industry challenging a federal law that expanded rules on how tobacco products can be marketed, including requiring packages to have graphic warning labels, Reuters reports (Hurley, Reuters, 4/22).
President Obama in 2009 signed legislation (HR 1256) that gave FDA regulatory powers over the content, labeling and marketing of cigarettes and other tobacco products. The measure, known as the Family Smoking Prevention and Tobacco Control Act, instructed FDA to release marketing restrictions and sponsorship bans for tobacco companies. For example, the law allows FDA to ban marketing claims including "low tar" and "light," among other provisions (American Health Line, 7/29/11). It also prohibits tobacco companies from sponsoring certain events and offering free samples (AP/Modern Healthcare, 4/22).
Tobacco companies owned by Reynolds American, British American Tobacco, Imperial Tobacco Group and Lorillard challenged the law, claiming that it violates their First Amendment rights to free speech (Reuters, 4/22). In March 2012, the 6th U.S. Circuit Court of Appeals upheld the federal government's authority to enforce the law's requirements. The tobacco companies then petitioned the Supreme Court to review that ruling (American Health Line, 3/20).
However, the high court on Monday refused to review it without comment, letting stand the lower court decision upholding the law (Kendall/Corbett Dooren, Wall Street Journal, 4/22).
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| FDA To Move Forward To Implement New Rules |
Monday's case is separate from another industry challenge to the rules' requirement of graphic warning labels on cigarette packages, Reuters notes (Reuters, 4/22).
In August 2012, a three-judge panel at the U.S. Court of Appeals for the District of Columbia Circuit ruled that it is unconstitutional for the federal government to require tobacco companies to add graphic warning labels to their products. The appeals court ruling affirmed a federal district court's ruling in November 2011 that the requirement violates tobacco companies' free speech rights.
After that ruling, the Obama administration dropped the requirement that tobacco companies place graphic warning labels on their cigarette packages and said that it would not seek a Supreme Court review in the case.
U.S. Attorney General Eric Holder said FDA would revise the requirement for the graphic warnings to ensure that they comply with the parameters of the First Amendment (American Health Line, 3/20).
After Monday's high court announcement, FDA said it will launch rulemaking to implement the law but did not set a timeline for the process, CQ HealthBeat reports.
"FDA is pleased with today's decision and that the agency's work can move forward to implement the Tobacco Control Act in a way that addresses this significant public health problem," the agency said (Norman, CQ HealthBeat, 4/22).
However, the Journal notes that rulemaking usually takes years and that the revised labels still might be subject to additional legal challenges (Wall Street Journal, 4/22).
-- compiled by Michelle Stuckey |
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MALPRACTICE: Diagnostic Errors Leading Cause of Successful Malpractice Claims, Study Finds
Diagnostic errors -- not surgical, obstetrical or medication mistakes -- are the leading cause of successful malpractice claims, but little is being done to identify and correct such errors, according to a study published in BMJ Quality & Safety, the Washington Post reports.
Johns Hopkins University researchers examined 25 years of malpractice data from the National Practitioner Data Bank, looking specifically at about 350,000 malpractice allegations from 1986 to 2010 that led to payouts.
The study found that diagnostic errors -- defined as missed, wrong or delayed diagnoses -- accounted for nearly 29% of all successful claims, followed by:
- Treatment inaccuracies (27%);
- Surgical mishaps (24%);
- Obstetrical problems (7%);
- Medication errors (5%); and
- Anesthesia complications (3%) (Brown, Washington Post, 4/22).
The study also found that 40% of diagnosis-related claims resulted in death. Meanwhile, diagnostic errors made up 35.2% of total payments, or $38.8 billion adjusted for inflation (Landro, Wall Street Journal, 4/22).
David Newman-Toker, an associate professor of neurology at Johns Hopkins and the study's lead author, said, "Overall, diagnostic errors have been underappreciated and under-recognized because they're difficult to measure and keep track of owing to the frequent gap between the time the error occurs and when it's detected" (McKinney, Modern Healthcare, 4/22). Although hospitals are required to report on certain quality measures, diagnostic errors are not reported or measured.
Newman-Token argued that more testing would not resolve the issue. He noted that 40% of emergency department patients complaining of dizziness receive a CT scan, which he said costs a total of about $500 million and is typically "useless" in determining the cause (Washington Post, 4/22). Nonetheless, fear of malpractice suits for a missed diagnosis is a major driver behind "defensive medicine," the study noted (Wall Street Journal, 4/22).
-- compiled by Hanna Jaquith |
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HIV/AIDS: Supreme Court Hears Arguments Over 'Anti-Prostitution Pledge' for U.S.-Funded HIV/AIDS Groups
The Supreme Court justices on Monday seemed closely divided during oral arguments in a case testing the limits of restrictions Congress can place on private groups that carry out work backed by the federal government, NPR's "All Things Considered" reports.
At issue is a 2003 law requiring that non-governmental organizations that receive federal grants to fight HIV/AIDS abroad pledge to explicitly oppose sex work and sex trafficking (Totenberg, "All Things Considered," NPR, 4/22).
The Supreme Court case stems from the government's efforts to overturn a 2011 ruling by the 2nd U.S. Circuit Court of Appeals, which agreed with the groups that the requirement -- as part of a provision in the U.S. Leadership Against HIV/AIDS, Tuberculosis and Malaria Act of 2003 -- undermines their anti-HIV/AIDS initiatives and violates their free-speech rights (Stempel, Reuters, 1/11). In particular, the groups argue that the pledge requires them to serve the government's interests outside the confines of the anti-HIV/AIDS programs. The pledge also can be counterproductive to efforts to curb HIV/AIDS among sex workers, they contend.
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| Government's Arguments |
Deputy Solicitor General Sri Srinivasan argued in defense of the law, contending that the federal government could prefer "organizations that agree" with its policies because those organizations would be the most likely to implement its anti-HIV/AIDS initiatives correctly (Bravin, Wall Street Journal, 4/22).
The justices posed several hypothetical questions probing the extent of any limitations on conditions the government might set on funding.
Srinivasan argued that the limitations would have to be germane to the government's objectives, noting that the stance against sex work and sex trafficking are "very germane" to the fight against HIV/AIDS.
Justice Samuel Alito called it a "dangerous proposition" to suggest that Congress could require grant recipients to agree with the government. In an example, Alito asked whether universities receiving federal funds or accepting subsidized student loans would have to espouse the government's views as well.
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| NGOs' Arguments |
David Bowker -- the attorney representing the NGOs involved in the case -- acknowledged that the government has a right to "fund the programs of its choosing and to control speech and conduct within those programs," but he argued that the requirements at issue compel individuals to "refrain from certain private speech outside the context of the government program" ("All Things Considered," NPR, 4/22).
The justices responded with another round of rigorous questions, asking whether the government should be able to fund programs committed to federal policy goals, even if the programs are not necessarily the most efficient (Wall Street Journal, 4/22).
Chief Justice John Roberts said the government is not banning speech but rather "picking out" an "appropriate partner to assist" in its anti-HIV/AIDS efforts. Bowker replied that the problem arises when NGOs and their staff members wish to discuss their work in other contexts outside of the day-to-day implementation of their programs -- for example, at international meetings or in published papers -- without the government's constraints ("All Things Considered," NPR, 4/22).
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| Outcome Uncertain |
According to the Wall Street Journal, Justices Alito, Ruth Bader Ginsburg and Sonia Sotomayor seemed sympathetic to the NGOs' position. However, the other justices were "harder to read."
Justice Elena Kagan -- who was solicitor general earlier in the litigation -- recused herself from the case (Wall Street Journal, 4/22). As a result, the eight remaining justices could deadlock, in which case the lower court ruling in favor of the NGOs would stand without setting a nationwide precedent.
The justices are expected to announce a decision by late June (Wolf, USA Today, 4/22).
-- compiled by Marcelle Maginnis |
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| PROVIDER NEWS |
AMA: American Medical Association Launches Diabetes, Heart Disease Initiative
The American Medical Association on Monday launched an initiative to reduce deaths and health care spending related to heart disease and type 2 diabetes, Modern Healthcare reports.
AMA President Jeremy Lazarus said the group has appropriated $6 million for the first year of the "Improving Health Outcomes" initiative. The program ultimately could continue for 10 or more years, he said (Robeznieks, Modern Healthcare, 4/22).
AMA will partner with the Johns Hopkins University's Armstrong Institute for Patient Safety and Quality to develop a model for detection and management of high blood pressure. AMA also will work with HHS' "Million Hearts" campaign to bring 10 million U.S. residents' high blood pressure under control by 2017.
In addition, the organization will partner with YMCA to target pre-diabetes patients, or those who have high blood sugar but have not yet been diagnosed with type 2 diabetes (Adams, CQ HealthBeat, 4/22).
Lazarus noted that the two diseases account for more than $535 billion in health care costs annually. In addition, he said heart disease accounts for one-third of all U.S. deaths, while current trends indicate that one-third of U.S. residents will have type 2 diabetes by 2050 (Modern Healthcare, 4/22).
-- compiled by Michelle Stuckey |
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| TRENDS & TIMELINES |
TOBACCO: New York City Council Proposes Raising Minimum Smoking Age to 21
The New York City Council on Monday proposed raising the age at which people can legally purchase cigarettes from 18 to 21, Reuters reports. The provision could give New York the strictest limits of any major U.S. city (Honan, Reuters, 4/22).
The proposal was introduced by Health Commissioner Thomas Farley and Christine Quinn, the City Council speaker and a mayoral candidate. Under the proposal, tobacco sellers who sell cigarettes to individuals under 21 would be subject to the fines and penalties currently incurred by selling cigarettes to minors. However, underage buyers would not be penalized for purchasing, possessing or smoking cigarettes.
The proposal is expected to be approved because it has the support of Quinn and Mayor Michael Bloomberg (Hartocollis, New York Times, 4/22).
-- compiled by Marcelle Maginnis |
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CANCER: Medical Centers Seek Gene Data To Boost Cancer Treatments
U.S. academic medical centers increasingly are gathering data on patient genomes to advance research on cancer treatments, the New York Times reports.
The research initiatives seek to spur development of "precision medicine," which includes prevention and treatment measures based on the characteristics of individual patients' genes. |
| Research Initiatives |
Among the academic medical centers conducting such research initiatives are:- Harvard Medical School's Center for Biomedical Informatics, which is using mathematical modeling to predict when genetic information could lead to more effective treatment;
- Mount Sinai Institute for Genomics and Multiscale Biology, where researchers have developed a "biobank" of DNA sequencing data on 24,000 patients with the goal of improving personalized medicine;
- Phoenix Children's Hospital's Ronald A. Matricaria Institute of Molecular Medicine, where researchers are planning to sequence the genomes of 30% of its child cancer patients to help develop better treatments; and
- Johns Hopkins University, which plans to develop a "systematic genomic sequencing program" that combines genomic analysis with data on patients' family history, environmental exposure and other factors to support preventive medicine.
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| Comments on Trend |
Peter Tonellato -- director of the Harvard personalized medicine lab and a clinical investigator in pathology at Beth Israel Deaconess Medical Center -- said, "There will be a moment in time when whole genome sequencing becomes ubiquitous throughout health care."
However, proponents of the research say that they are a long way from deriving useful information from genomic sequencing, leading some experts to question the cost of the research at a time of financial pressure in the U.S. health care system.
Robert Green -- a Harvard professor and medical geneticist at Brigham and Women's Hospital -- said, "One of the most prominent downsides [to genome sequencing] is you start chasing risks for a whole lot of disease[s] you'll never have and generate a lot of cost for little benefits" (Hartocollis, New York Times, 4/21).
-- compiled by Heather Drost |
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| HEALTH IT |
HEALTH IT: New Work Group Aims To Boost Patient Safety, Innovation in Health IT
| HHS and the Federal Communications Commission have convened a new work group charged with identifying ways to improve patient safety and promote innovation in health IT, Healthcare IT News reports. The work group will hold its first meeting April 29 (Monegain, Healthcare IT News, 4/19). |
| Goals of Work Group |
The Food and Drug Administration Safety Innovation Act authorized the creation of the group, called the FDASIA Workgroup. The group will report to the Health IT Policy Committee, which advises FDA, FCC and the Office of the National Coordinator for Health IT (Goedert, Health Data Management, 4/19).
The group is tasked with developing a report that proposes strategies and recommendations for a risk-based regulatory framework for mobile health applications and other health IT tools. The framework would seek to:- Avoid regulatory duplication;
- Ensure patient safety; and
- Promote innovation.
The public will have opportunities to comment on the issues discussed at the work group meetings. In addition, documents reviewed at the meetings will be posted to ONC's website. |
| Work Group Membership |
The work group's membership includes:- Federal officials;
- Experts who represent patients, consumers, health care providers, startup companies, health plans and third-party payers;
- IT and health IT vendors;
- Employers;
- Venture capital investors; and
- Other stakeholders.
In a statement, FCC Chair Julius Genachowski said, "We anticipate that this talented group of leaders from their respective fields of discipline will help to bring fresh ideas to the table with an eye towards ensuring patient safety."
A full list of the work group's members is available from HHS (Healthcare IT News, 4/19).
-- compiled by Hanna Jaquith |
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| STATELINES |
RX DRUGS: Some States Getting More Aggressive in Challenging Drugmakers Over Deceptive Marketing
Some states have become more aggressive in charging drugmakers with deceptive marketing practices, a trend that widens the potential liability for companies that already have paid large amounts to settle federal investigations, the Wall Street Journal reports. According to the Journal, many states are using consumer-protection laws that traditionally have been used to shield residents from debt collectors or car sellers.
Some of the lawsuits have been resolved in multistate settlements. For example, Johnson & Johnson in 2012 paid $181 million to settle allegations by 36 states and Washington, D.C., that the company promoted antipsychotic Risperdal for unapproved uses.
However, other states have opted to file individual suits against major drugmakers. For example, attorneys general in Kentucky, Maryland and five other states have filed separate lawsuits against GlaxoSmithKline alleging that the company illegally marketed the diabetes drug Avandia.
According to the Journal, such lawsuits recently have resulted in large settlements and judgments for states. For example, a state judge in Arkansas last year ordered J&J to pay $1.2 billion after a jury found that the company violated consumer-protection and Medicaid-fraud laws in its marketing of Risperdal. The Journal reports that states find the lawsuits attractive because they typically do not have to prove that drugmakers caused specific injury or harm, only that they improperly marketed the product.
Drugmakers argue that the allegations amount to overreach because there is little evidence that patients have been harmed by the targeted products. Further, state penalties enacted based on federal drug law violations raise "serious legal and constitutional questions," according to Matt Bennett, a spokesperson for the Pharmaceutical Research and Manufacturers of America (Loftus, Wall Street Journal, 4/22).
-- compiled by Marcelle Maginnis |
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| ODDS & ENDS |
WHAT WE'RE READING: Say 'No' to the Cinnamon Challenge
- "Just Say No to 'Cinnamon Challenge': Pediatricians," Reuters: A popular dare among young people that involves attempting to swallow a tablespoon of ground cinnamon in a minute without water could lead to breathing problems, lung inflammation and asthma attacks.
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