Joyce Frieden

WASHINGTON — If a child with what seems to be asthma appears in your waiting room, a skin test for allergies will tell you whether you'll be seeing a lot more of this patient, according to Elena R. Reece, M.D.

However, an even better predictor of chronic asthma is atopy combined with wheezing, she said at a conference sponsored by the Mid-Atlantic Center for Children's Health and the Environment. “The most common cause of wheezing in young children is viral respiratory infection. But the strongest predictor for wheezing that develops into asthma is atopy. About 70%-90% of children with asthma are atopic.”

If the patient also started wheezing early in life, “it's bad” as far as a prognosis is concerned, said Dr. Reece, chief of allergy and clinical immunology at Howard University Hospital, Washington. “The earlier you have the onset of wheezing, the more likely it is to be persistent and severe. Lung function in these children is significantly reduced at age 6.”

There are three different patterns of wheezing in children, she said:

▸ Transient wheezers have reduced lung function after birth with congenitally smaller airways. They start wheezing before 6 months of age but usually stop by 6 years of age, when the lungs are sufficiently grown.

▸ Persistent wheezers, on the other hand, have normal lung function at birth, but function is significantly reduced by age 6 months, Dr. Reece said. “This group has more frequent asthma symptoms during the first year of life.”

▸ Late wheezers begin sometime around their 6th birthday. Lung function in this group, however, is not significantly reduced.

With or without wheezing, making a definitive diagnosis can be tricky because there is no way to objectively measure symptoms in very young children. In general, Dr. Reece said, pediatric asthma patients who start having symptoms early are more likely to have pronounced asthma symptoms, increased use of albuterol, reduced lung function, and markers of atopy.

Consider the possibility of asthma if a child is repeatedly diagnosed with reactive airways disease, recurrent bronchitis, chronic cough, wheezy bronchitis, asthmatic bronchitis, or recurrent bronchiolitis.

WASHINGTON — If a child with what seems to be asthma appears in your waiting room, a skin test for allergies will tell you whether you'll be seeing a lot more of this patient, according to Elena R. Reece, M.D.

However, an even better predictor of chronic asthma is atopy combined with wheezing, she said at a conference sponsored by the Mid-Atlantic Center for Children's Health and the Environment. “The most common cause of wheezing in young children is viral respiratory infection. But the strongest predictor for wheezing that develops into asthma is atopy. About 70%-90% of children with asthma are atopic.”

If the patient also started wheezing early in life, “it's bad” as far as a prognosis is concerned, said Dr. Reece, chief of allergy and clinical immunology at Howard University Hospital, Washington. “The earlier you have the onset of wheezing, the more likely it is to be persistent and severe. Lung function in these children is significantly reduced at age 6.”

There are three different patterns of wheezing in children, she said:

▸ Transient wheezers have reduced lung function after birth with congenitally smaller airways. They start wheezing before 6 months of age but usually stop by 6 years of age, when the lungs are sufficiently grown.

▸ Persistent wheezers, on the other hand, have normal lung function at birth, but function is significantly reduced by age 6 months, Dr. Reece said. “This group has more frequent asthma symptoms during the first year of life.”

▸ Late wheezers begin sometime around their 6th birthday. Lung function in this group, however, is not significantly reduced.

With or without wheezing, making a definitive diagnosis can be tricky because there is no way to objectively measure symptoms in very young children. In general, Dr. Reece said, pediatric asthma patients who start having symptoms early are more likely to have pronounced asthma symptoms, increased use of albuterol, reduced lung function, and markers of atopy.

Consider the possibility of asthma if a child is repeatedly diagnosed with reactive airways disease, recurrent bronchitis, chronic cough, wheezy bronchitis, asthmatic bronchitis, or recurrent bronchiolitis.

WASHINGTON — If a child with what seems to be asthma appears in your waiting room, a skin test for allergies will tell you whether you'll be seeing a lot more of this patient, according to Elena R. Reece, M.D.

However, an even better predictor of chronic asthma is atopy combined with wheezing, she said at a conference sponsored by the Mid-Atlantic Center for Children's Health and the Environment. “The most common cause of wheezing in young children is viral respiratory infection. But the strongest predictor for wheezing that develops into asthma is atopy. About 70%-90% of children with asthma are atopic.”

If the patient also started wheezing early in life, “it's bad” as far as a prognosis is concerned, said Dr. Reece, chief of allergy and clinical immunology at Howard University Hospital, Washington. “The earlier you have the onset of wheezing, the more likely it is to be persistent and severe. Lung function in these children is significantly reduced at age 6.”

There are three different patterns of wheezing in children, she said:

▸ Transient wheezers have reduced lung function after birth with congenitally smaller airways. They start wheezing before 6 months of age but usually stop by 6 years of age, when the lungs are sufficiently grown.

▸ Persistent wheezers, on the other hand, have normal lung function at birth, but function is significantly reduced by age 6 months, Dr. Reece said. “This group has more frequent asthma symptoms during the first year of life.”

▸ Late wheezers begin sometime around their 6th birthday. Lung function in this group, however, is not significantly reduced.

With or without wheezing, making a definitive diagnosis can be tricky because there is no way to objectively measure symptoms in very young children. In general, Dr. Reece said, pediatric asthma patients who start having symptoms early are more likely to have pronounced asthma symptoms, increased use of albuterol, reduced lung function, and markers of atopy.

Consider the possibility of asthma if a child is repeatedly diagnosed with reactive airways disease, recurrent bronchitis, chronic cough, wheezy bronchitis, asthmatic bronchitis, or recurrent bronchiolitis.

WASHINGTON – The trend toward consumer-driven health care will ultimately improve overall health care quality, Regina Herzlinger, Ph.D., said at a consensus conference sponsored by the American Association of Clinical Endocrinologists.

Dr. Herzlinger, professor and chair of business administration at Harvard Business School, in Boston, contrasted the health care industry with the automotive industry. The automotive industry, which is already consumer driven, is deflationary and features increasing product quality, lots of available product information, and widespread ownership. The health care industry, on the other hand, is not consumer-driven and is characterized by inflation, unknown quality of care, and 46 million people without health insurance.

She noted that what helped the automotive industry along was the presence of entrepreneurs, who ended up being richly rewarded for their efforts. For instance, Henry Ford, founder of the Ford Motor Co., created a new, less expensive form of steel from which to make cars. “Within a decade, car ownership went from 10,000 to 1 million,” she noted.

Although Mr. Ford and other automotive industry pioneers were rewarded, innovation in health care is not well rewarded, Dr. Herzlinger continued. As an example, she cited the case of Ralph Snyderman, M.D., who came up with the idea of integrating the care of patients with heart failure by organizing care teams. “In 1 year, he lowered the costs by 40%,” she said.

And what was his reward for doing so? “He lost the entire savings, because the health care system does not pay for making sick people better. It pays for days in the hospital, for doctor visits, for components of care. So the healthier he made people, the fewer people went to the hospital, the fewer doctor visits there were, and the more money he lost. Right now, if you're a Henry Ford, you're punished, and we have very poor quality,” she said.

With consumer-driven health care, different products will be developed to respond to the needs of different consumers, she continued. And insurers will realize they can be rewarded for considering consumers' longer-term needs, Dr. Herzlinger said.

“I want a 5-year insurance policy. I want my insurer to really care about my long-term health,” she said. Switzerland has 5-year insurance policies, she noted, “and if, at the end of the 5 years, you're healthier than would have been predicted at the beginning, you get 45% of your money back. How's that for a good deal for the insurer, the provider, and the customer?”

Dr. Herzlinger predicted that it will become commonplace for insurers to offer integrated team care for chronic diseases. The teams “will be wired, they'll be focused, and they're going to be paid for the fact that they're dealing with sicker people,” she said.

Offering such teams will be a matter of “simple economics,” she continued. “You're the insurer; 80% [of your money] goes for sick people. If you want to make it cheaper and better, how better to make it cheaper and better than to go to these organizations?”

Under a consumer-driven health care system, physicians will be paid based on outcomes, “and there will be long-term contracts so you don't look at your patients in a 1-year kind of window,” she said. “Investments in self-care early on will be rewarded.”

One big driver behind consumer-driven health care will be aging baby boomers, a group that Dr. Herzlinger called “the most narcissistic, self-centered, empowered, and effective cohort we've ever had in the United States. The idea that this group isn't going to get what it wants, that's fantasy. They want [doctors] to integrate themselves, seize control of the system, and help patients care for their chronic diseases.”

She took issue with the notion that consumer-driven health care plans will be disadvantageous to sick people. “Quite the contrary. It will finally focus attention on sick people. Right now it's in the incentive of the insurers to get rid of sick people and not to pay people who treat sick people well. But if you go to a consumer-driven system with risk-adjusted prices, the sick will be very attractive kinds of entities.”

She also disputed the notion that only those who can afford high-cost plans will get the highest-quality health care. “In the car market, what is the best car in the U.S.? Toyota,” she said. “Is that the highest-cost car? Not by a long shot.” Instead, it's the best-quality care “because that's where all the money is. That's the mass market.”

WASHINGTON – The trend toward consumer-driven health care will ultimately improve overall health care quality, Regina Herzlinger, Ph.D., said at a consensus conference sponsored by the American Association of Clinical Endocrinologists.

Dr. Herzlinger, professor and chair of business administration at Harvard Business School, in Boston, contrasted the health care industry with the automotive industry. The automotive industry, which is already consumer driven, is deflationary and features increasing product quality, lots of available product information, and widespread ownership. The health care industry, on the other hand, is not consumer-driven and is characterized by inflation, unknown quality of care, and 46 million people without health insurance.

She noted that what helped the automotive industry along was the presence of entrepreneurs, who ended up being richly rewarded for their efforts. For instance, Henry Ford, founder of the Ford Motor Co., created a new, less expensive form of steel from which to make cars. “Within a decade, car ownership went from 10,000 to 1 million,” she noted.

Although Mr. Ford and other automotive industry pioneers were rewarded, innovation in health care is not well rewarded, Dr. Herzlinger continued. As an example, she cited the case of Ralph Snyderman, M.D., who came up with the idea of integrating the care of patients with heart failure by organizing care teams. “In 1 year, he lowered the costs by 40%,” she said.

And what was his reward for doing so? “He lost the entire savings, because the health care system does not pay for making sick people better. It pays for days in the hospital, for doctor visits, for components of care. So the healthier he made people, the fewer people went to the hospital, the fewer doctor visits there were, and the more money he lost. Right now, if you're a Henry Ford, you're punished, and we have very poor quality,” she said.

With consumer-driven health care, different products will be developed to respond to the needs of different consumers, she continued. And insurers will realize they can be rewarded for considering consumers' longer-term needs, Dr. Herzlinger said.

“I want a 5-year insurance policy. I want my insurer to really care about my long-term health,” she said. Switzerland has 5-year insurance policies, she noted, “and if, at the end of the 5 years, you're healthier than would have been predicted at the beginning, you get 45% of your money back. How's that for a good deal for the insurer, the provider, and the customer?”

Dr. Herzlinger predicted that it will become commonplace for insurers to offer integrated team care for chronic diseases. The teams “will be wired, they'll be focused, and they're going to be paid for the fact that they're dealing with sicker people,” she said.

Offering such teams will be a matter of “simple economics,” she continued. “You're the insurer; 80% [of your money] goes for sick people. If you want to make it cheaper and better, how better to make it cheaper and better than to go to these organizations?”

Under a consumer-driven health care system, physicians will be paid based on outcomes, “and there will be long-term contracts so you don't look at your patients in a 1-year kind of window,” she said. “Investments in self-care early on will be rewarded.”

One big driver behind consumer-driven health care will be aging baby boomers, a group that Dr. Herzlinger called “the most narcissistic, self-centered, empowered, and effective cohort we've ever had in the United States. The idea that this group isn't going to get what it wants, that's fantasy. They want [doctors] to integrate themselves, seize control of the system, and help patients care for their chronic diseases.”

She took issue with the notion that consumer-driven health care plans will be disadvantageous to sick people. “Quite the contrary. It will finally focus attention on sick people. Right now it's in the incentive of the insurers to get rid of sick people and not to pay people who treat sick people well. But if you go to a consumer-driven system with risk-adjusted prices, the sick will be very attractive kinds of entities.”

She also disputed the notion that only those who can afford high-cost plans will get the highest-quality health care. “In the car market, what is the best car in the U.S.? Toyota,” she said. “Is that the highest-cost car? Not by a long shot.” Instead, it's the best-quality care “because that's where all the money is. That's the mass market.”

WASHINGTON – The trend toward consumer-driven health care will ultimately improve overall health care quality, Regina Herzlinger, Ph.D., said at a consensus conference sponsored by the American Association of Clinical Endocrinologists.

Dr. Herzlinger, professor and chair of business administration at Harvard Business School, in Boston, contrasted the health care industry with the automotive industry. The automotive industry, which is already consumer driven, is deflationary and features increasing product quality, lots of available product information, and widespread ownership. The health care industry, on the other hand, is not consumer-driven and is characterized by inflation, unknown quality of care, and 46 million people without health insurance.

She noted that what helped the automotive industry along was the presence of entrepreneurs, who ended up being richly rewarded for their efforts. For instance, Henry Ford, founder of the Ford Motor Co., created a new, less expensive form of steel from which to make cars. “Within a decade, car ownership went from 10,000 to 1 million,” she noted.

Although Mr. Ford and other automotive industry pioneers were rewarded, innovation in health care is not well rewarded, Dr. Herzlinger continued. As an example, she cited the case of Ralph Snyderman, M.D., who came up with the idea of integrating the care of patients with heart failure by organizing care teams. “In 1 year, he lowered the costs by 40%,” she said.

And what was his reward for doing so? “He lost the entire savings, because the health care system does not pay for making sick people better. It pays for days in the hospital, for doctor visits, for components of care. So the healthier he made people, the fewer people went to the hospital, the fewer doctor visits there were, and the more money he lost. Right now, if you're a Henry Ford, you're punished, and we have very poor quality,” she said.

With consumer-driven health care, different products will be developed to respond to the needs of different consumers, she continued. And insurers will realize they can be rewarded for considering consumers' longer-term needs, Dr. Herzlinger said.

“I want a 5-year insurance policy. I want my insurer to really care about my long-term health,” she said. Switzerland has 5-year insurance policies, she noted, “and if, at the end of the 5 years, you're healthier than would have been predicted at the beginning, you get 45% of your money back. How's that for a good deal for the insurer, the provider, and the customer?”

Dr. Herzlinger predicted that it will become commonplace for insurers to offer integrated team care for chronic diseases. The teams “will be wired, they'll be focused, and they're going to be paid for the fact that they're dealing with sicker people,” she said.

Offering such teams will be a matter of “simple economics,” she continued. “You're the insurer; 80% [of your money] goes for sick people. If you want to make it cheaper and better, how better to make it cheaper and better than to go to these organizations?”

Under a consumer-driven health care system, physicians will be paid based on outcomes, “and there will be long-term contracts so you don't look at your patients in a 1-year kind of window,” she said. “Investments in self-care early on will be rewarded.”

One big driver behind consumer-driven health care will be aging baby boomers, a group that Dr. Herzlinger called “the most narcissistic, self-centered, empowered, and effective cohort we've ever had in the United States. The idea that this group isn't going to get what it wants, that's fantasy. They want [doctors] to integrate themselves, seize control of the system, and help patients care for their chronic diseases.”

She took issue with the notion that consumer-driven health care plans will be disadvantageous to sick people. “Quite the contrary. It will finally focus attention on sick people. Right now it's in the incentive of the insurers to get rid of sick people and not to pay people who treat sick people well. But if you go to a consumer-driven system with risk-adjusted prices, the sick will be very attractive kinds of entities.”

She also disputed the notion that only those who can afford high-cost plans will get the highest-quality health care. “In the car market, what is the best car in the U.S.? Toyota,” she said. “Is that the highest-cost car? Not by a long shot.” Instead, it's the best-quality care “because that's where all the money is. That's the mass market.”

WASHINGTON – Consumer-driven health care may be all the rage right now, but there's no single cure for the nation's ailing health care system, several experts said at a health care congress sponsored by the Wall Street Journal and CNBC.

“There are no silver bullets,” said Douglas Holtz-Eakin, Ph.D., director of the Congressional Budget Office (CBO). “There is no single item–technology, disease management, tort law–that is likely to prove to be the answer to aligning incentives, providing high-quality care at reasonable costs, and financing it in a way that's economically viable. More likely, we'll have a series of incremental changes” that will shore up the system.

“Rising health care costs represent the central domestic issue at this time,” Dr. Holtz-Eakin said. For example, over the next 50 years, if nothing is done, “the cost of Medicare and Medicaid will rise from 4% of the gross domestic product to 20%–the current size of the entire federal budget.”

Because the population is aging, “we indeed may spend more than we do now” on health care, Dr. Holtz-Eakin continued. “But the key issue is to make sure we do not overspend, that the dollars per unit of high-quality care match up with our desires.”

Robert Reischauer, Ph.D., a former CBO director who is now president of the Urban Institute, noted that Medicare was a particular concern, since Medicare spending is expected to grow very rapidly over the next 10 years. He listed four possible solutions for the Medicare budget crisis.

The first possibility is to reduce the scope of coverage, but “that isn't a practical course of action,” he said. Another option is to restrain the growth in payments to providers, but already, Medicare is considered “not too generous,” compared with private payers, since it pays on average only about 80% of the private rate. “[Payment restraint] is clearly not going to happen,” he said.

The third option is to make beneficiaries pay more for care in the form of higher premiums, deductibles, and cost sharing.

“Some people think that will cause beneficiaries to purchase more rationally and cut out low-value services, but we have to remember, the vast bulk of spending is on individuals who are very sick, have many chronic conditions, and aren't in a position to comparison-shop,” he said. “Moreover, the services that they're purchasing are extremely complex and confusing, and providers play a very significant role in determining the demand for and type of services received by beneficiaries.

“Before we bet the ranch on this approach,” he continued, “we're going to have to see what happens to spending patterns among the under-65 population as they are faced with high-deductible plans, health savings accounts, consumer-driven health plans, and other approaches to incentivize them to purchase more rationally. If this proves to be a successful approach for the under-65 population, one can see it gradually angling into the bag of tools that Medicare has.”

However, Dr. Reischauer noted, the potential for shifting more costs onto beneficiaries is limited, “because they already spend a considerable amount of their incomes on Medicare cost-sharing of one sort or another. By 2025, the average 65-year-old Medicare beneficiary will be paying more than the size of their Social Security check in cost-sharing and deductibles.”

A fourth approach is to restructure Medicare in ways to generate competition among providers, Dr. Reischauer said. This would mean emphasizing technologies that improve efficiency, such as electronic health records and electronic prescribing.

He noted that researchers at Dartmouth University have looked at health care utilization across geographic areas and found that beneficiaries receiving higher volumes of services generally have poorer health outcomes, even after differences in their health status are accounted for.

“It's conceivable that as our ability to measure differences in quality and to reward quality effectively improves, the Medicare system could be transformed into one that pays only for care which is both necessary and beneficial, but this is likely to be a long and difficult row to hoe,” he said.

Gail Wilensky, a former administrator of the Centers for Medicare and Medicaid Services who is now a senior fellow at Project HOPE, in Bethesda, Md., expressed disappointment that Congress did not do more to address the issue of rising costs when it passed the Medicare Modernization Act of 2003.

That law “is a good example of eating dessert first,” she said. “There was an opportunity to try and slow down spending in a significant way while a new benefit was being introduced, but primarily, what [the law] does is provide a new benefit and some additional payments to providers of services, but not very much in terms of trying to restructure Medicare for the future.”

One little-known provision of the law does attempt to address the cost issue, she added. “Starting in 2007, Part B will be much more related to income. The subsidy will start declining significantly for those with higher incomes. As the baby boomers begin to retire, some of them with higher incomes and assets, this is at least one opportunity” to help with the cost problem.

Americans are going to need to rethink the entire issue of retirement, Dr. Wilensky predicted.

“A couple of weeks ago, [Rep.] Bill Thomas [R-Calif.] talked about the need to think about Social Security and Medicare together. Both represent transfers from the working population to the dependent, nonworking population. To begin thinking about this as a joint issue may allow us to make more sensible decisions,” she said.

For example, Americans should consider “how we can change both fiscal policies and cultural expectations so our whole concept of retirement begins to … reflect the increasing longevity and, for many individuals, the increased well-being and health status they have at age 65 relative to what 65 meant when Medicare was introduced in 1965,” she said. “We need to think about fiscal policies to encourage continued labor force participation for people at 65 and 70.”

WASHINGTON – Consumer-driven health care may be all the rage right now, but there's no single cure for the nation's ailing health care system, several experts said at a health care congress sponsored by the Wall Street Journal and CNBC.

“There are no silver bullets,” said Douglas Holtz-Eakin, Ph.D., director of the Congressional Budget Office (CBO). “There is no single item–technology, disease management, tort law–that is likely to prove to be the answer to aligning incentives, providing high-quality care at reasonable costs, and financing it in a way that's economically viable. More likely, we'll have a series of incremental changes” that will shore up the system.

“Rising health care costs represent the central domestic issue at this time,” Dr. Holtz-Eakin said. For example, over the next 50 years, if nothing is done, “the cost of Medicare and Medicaid will rise from 4% of the gross domestic product to 20%–the current size of the entire federal budget.”

Because the population is aging, “we indeed may spend more than we do now” on health care, Dr. Holtz-Eakin continued. “But the key issue is to make sure we do not overspend, that the dollars per unit of high-quality care match up with our desires.”

Robert Reischauer, Ph.D., a former CBO director who is now president of the Urban Institute, noted that Medicare was a particular concern, since Medicare spending is expected to grow very rapidly over the next 10 years. He listed four possible solutions for the Medicare budget crisis.

The first possibility is to reduce the scope of coverage, but “that isn't a practical course of action,” he said. Another option is to restrain the growth in payments to providers, but already, Medicare is considered “not too generous,” compared with private payers, since it pays on average only about 80% of the private rate. “[Payment restraint] is clearly not going to happen,” he said.

The third option is to make beneficiaries pay more for care in the form of higher premiums, deductibles, and cost sharing.

“Some people think that will cause beneficiaries to purchase more rationally and cut out low-value services, but we have to remember, the vast bulk of spending is on individuals who are very sick, have many chronic conditions, and aren't in a position to comparison-shop,” he said. “Moreover, the services that they're purchasing are extremely complex and confusing, and providers play a very significant role in determining the demand for and type of services received by beneficiaries.

“Before we bet the ranch on this approach,” he continued, “we're going to have to see what happens to spending patterns among the under-65 population as they are faced with high-deductible plans, health savings accounts, consumer-driven health plans, and other approaches to incentivize them to purchase more rationally. If this proves to be a successful approach for the under-65 population, one can see it gradually angling into the bag of tools that Medicare has.”

However, Dr. Reischauer noted, the potential for shifting more costs onto beneficiaries is limited, “because they already spend a considerable amount of their incomes on Medicare cost-sharing of one sort or another. By 2025, the average 65-year-old Medicare beneficiary will be paying more than the size of their Social Security check in cost-sharing and deductibles.”

A fourth approach is to restructure Medicare in ways to generate competition among providers, Dr. Reischauer said. This would mean emphasizing technologies that improve efficiency, such as electronic health records and electronic prescribing.

He noted that researchers at Dartmouth University have looked at health care utilization across geographic areas and found that beneficiaries receiving higher volumes of services generally have poorer health outcomes, even after differences in their health status are accounted for.

“It's conceivable that as our ability to measure differences in quality and to reward quality effectively improves, the Medicare system could be transformed into one that pays only for care which is both necessary and beneficial, but this is likely to be a long and difficult row to hoe,” he said.

Gail Wilensky, a former administrator of the Centers for Medicare and Medicaid Services who is now a senior fellow at Project HOPE, in Bethesda, Md., expressed disappointment that Congress did not do more to address the issue of rising costs when it passed the Medicare Modernization Act of 2003.

That law “is a good example of eating dessert first,” she said. “There was an opportunity to try and slow down spending in a significant way while a new benefit was being introduced, but primarily, what [the law] does is provide a new benefit and some additional payments to providers of services, but not very much in terms of trying to restructure Medicare for the future.”

One little-known provision of the law does attempt to address the cost issue, she added. “Starting in 2007, Part B will be much more related to income. The subsidy will start declining significantly for those with higher incomes. As the baby boomers begin to retire, some of them with higher incomes and assets, this is at least one opportunity” to help with the cost problem.

Americans are going to need to rethink the entire issue of retirement, Dr. Wilensky predicted.

“A couple of weeks ago, [Rep.] Bill Thomas [R-Calif.] talked about the need to think about Social Security and Medicare together. Both represent transfers from the working population to the dependent, nonworking population. To begin thinking about this as a joint issue may allow us to make more sensible decisions,” she said.

For example, Americans should consider “how we can change both fiscal policies and cultural expectations so our whole concept of retirement begins to … reflect the increasing longevity and, for many individuals, the increased well-being and health status they have at age 65 relative to what 65 meant when Medicare was introduced in 1965,” she said. “We need to think about fiscal policies to encourage continued labor force participation for people at 65 and 70.”

WASHINGTON – Consumer-driven health care may be all the rage right now, but there's no single cure for the nation's ailing health care system, several experts said at a health care congress sponsored by the Wall Street Journal and CNBC.

“There are no silver bullets,” said Douglas Holtz-Eakin, Ph.D., director of the Congressional Budget Office (CBO). “There is no single item–technology, disease management, tort law–that is likely to prove to be the answer to aligning incentives, providing high-quality care at reasonable costs, and financing it in a way that's economically viable. More likely, we'll have a series of incremental changes” that will shore up the system.

“Rising health care costs represent the central domestic issue at this time,” Dr. Holtz-Eakin said. For example, over the next 50 years, if nothing is done, “the cost of Medicare and Medicaid will rise from 4% of the gross domestic product to 20%–the current size of the entire federal budget.”

Because the population is aging, “we indeed may spend more than we do now” on health care, Dr. Holtz-Eakin continued. “But the key issue is to make sure we do not overspend, that the dollars per unit of high-quality care match up with our desires.”

Robert Reischauer, Ph.D., a former CBO director who is now president of the Urban Institute, noted that Medicare was a particular concern, since Medicare spending is expected to grow very rapidly over the next 10 years. He listed four possible solutions for the Medicare budget crisis.

The first possibility is to reduce the scope of coverage, but “that isn't a practical course of action,” he said. Another option is to restrain the growth in payments to providers, but already, Medicare is considered “not too generous,” compared with private payers, since it pays on average only about 80% of the private rate. “[Payment restraint] is clearly not going to happen,” he said.

The third option is to make beneficiaries pay more for care in the form of higher premiums, deductibles, and cost sharing.

“Some people think that will cause beneficiaries to purchase more rationally and cut out low-value services, but we have to remember, the vast bulk of spending is on individuals who are very sick, have many chronic conditions, and aren't in a position to comparison-shop,” he said. “Moreover, the services that they're purchasing are extremely complex and confusing, and providers play a very significant role in determining the demand for and type of services received by beneficiaries.

“Before we bet the ranch on this approach,” he continued, “we're going to have to see what happens to spending patterns among the under-65 population as they are faced with high-deductible plans, health savings accounts, consumer-driven health plans, and other approaches to incentivize them to purchase more rationally. If this proves to be a successful approach for the under-65 population, one can see it gradually angling into the bag of tools that Medicare has.”

However, Dr. Reischauer noted, the potential for shifting more costs onto beneficiaries is limited, “because they already spend a considerable amount of their incomes on Medicare cost-sharing of one sort or another. By 2025, the average 65-year-old Medicare beneficiary will be paying more than the size of their Social Security check in cost-sharing and deductibles.”

A fourth approach is to restructure Medicare in ways to generate competition among providers, Dr. Reischauer said. This would mean emphasizing technologies that improve efficiency, such as electronic health records and electronic prescribing.

He noted that researchers at Dartmouth University have looked at health care utilization across geographic areas and found that beneficiaries receiving higher volumes of services generally have poorer health outcomes, even after differences in their health status are accounted for.

“It's conceivable that as our ability to measure differences in quality and to reward quality effectively improves, the Medicare system could be transformed into one that pays only for care which is both necessary and beneficial, but this is likely to be a long and difficult row to hoe,” he said.

Gail Wilensky, a former administrator of the Centers for Medicare and Medicaid Services who is now a senior fellow at Project HOPE, in Bethesda, Md., expressed disappointment that Congress did not do more to address the issue of rising costs when it passed the Medicare Modernization Act of 2003.

That law “is a good example of eating dessert first,” she said. “There was an opportunity to try and slow down spending in a significant way while a new benefit was being introduced, but primarily, what [the law] does is provide a new benefit and some additional payments to providers of services, but not very much in terms of trying to restructure Medicare for the future.”

One little-known provision of the law does attempt to address the cost issue, she added. “Starting in 2007, Part B will be much more related to income. The subsidy will start declining significantly for those with higher incomes. As the baby boomers begin to retire, some of them with higher incomes and assets, this is at least one opportunity” to help with the cost problem.

Americans are going to need to rethink the entire issue of retirement, Dr. Wilensky predicted.

“A couple of weeks ago, [Rep.] Bill Thomas [R-Calif.] talked about the need to think about Social Security and Medicare together. Both represent transfers from the working population to the dependent, nonworking population. To begin thinking about this as a joint issue may allow us to make more sensible decisions,” she said.

For example, Americans should consider “how we can change both fiscal policies and cultural expectations so our whole concept of retirement begins to … reflect the increasing longevity and, for many individuals, the increased well-being and health status they have at age 65 relative to what 65 meant when Medicare was introduced in 1965,” she said. “We need to think about fiscal policies to encourage continued labor force participation for people at 65 and 70.”

Autism Education Costs High

The cost of educating children with autism is almost triple that of educating children who receive no special education services, according to a report from the Government Accountability Office. The GAO reviewed data from the Special Education Expenditure Project funded by the Department of Education and found that the average cost of educating a child with autism–$18,000 in the 1999-2000 school year–“was among the highest per-pupil expenditures for school-age children receiving special education services in public schools.” The report also noted that the number of autistic children given special education services increased by more than 500% in the last decade. Rep. Diane Watson (D-Calif.), who co-commissioned the report, said “that better diagnosis and a broader definition of autism may in part explain the substantial increase in autistic children. However, I believe that further studies should be undertaken of other risk factors, including the correlation between mercury-containing vaccines and higher rates of autism.”

More Drug Treatment Courts Urged

The federal government should spend $30.5 million to increase the number of drug treatment courts nationwide, according to John P. Walters, director of the Office of National Drug Control Policy. “Drug treatment courts … are an effective way of reducing the drug problem in America,” Mr. Walters said in a statement accompanying the release of President Bush's 2005 National Drug Control Strategy. He quoted research showing that, of 17,000 drug program graduates nationwide, only 16.4% had been rearrested and charged with a felony in the first year. “By giving judges the power to refer people to treatment we reduce criminal recidivism, save taxpayer money, and heal those who have become enslaved by drug addiction.” The 1,600 drug courts now operating in the United States emphasize treatment and frequent monitoring instead of prison time.

Groups Push Nondiscrimination Bill

A coalition of mental health groups is lobbying for the passage of the Medicare Mental Health Copayment Equity Act, which would mandate that copayments for mental health services be the same as those for other health services. Currently, there is a 50% copay for mental health services, compared with a 20% copay for most other health care services. “This is discrimination, plain and simple,” James H. Scully Jr., M.D., medical director of the American Psychiatric Association, said in a statement. “Passage of this legislation is long overdue.” The bill's chief sponsors are Rep. Ted Strickland (D-Ohio) and Rep. Tim Murphy (R-Pa.). Other groups supporting the legislation include the American Association for Geriatric Psychiatry and the National Alliance for the Mentally Ill.

Paxil Distribution Halted

The Food and Drug Administration halted distribution of Paxil CR (paroxetine controlled release), an antidepressant made by GlaxoSmithKline, in early March. The agency cited “ongoing concerns about manufacturing quality” but said it did not believe the drug posed significant harm to consumers. During an inspection, the FDA found that “the Paxil CR tablets could split apart and that patients could receive a portion of the tablets that lacks any active ingredient, or alternatively a portion that contains active ingredient and does not have the intended controlled-release effect.” GlaxoSmithKline said in a statement that it agreed the drug posed no immediate threat and urged patients taking the drug to speak with their physicians if they had questions. The company said it was working to resolve the problems as quickly as possible.

Views on Assisted Suicide

More than half of physicians responding to a national survey said that they believe it's ethical to assist a patient in committing suicide. Approximately 57% of the 1,000 physicians said it was ethical, while 39% said it was unethical. The survey was conducted by HCD Research, a marketing and communications research company, and the Louis Finkelstein Institute for Social and Religious Research. In addition, 41% of the physicians surveyed would endorse the legalization of physician-assisted suicide under a wide variety of circumstances, while 30% support its legalization in a few cases and 29% oppose any legalization. Although many physicians support physician-assisted suicide as a public policy, the results were mixed when it came to personally participating in an assisted suicide. About 46% said they would not assist a patient for any reason, 34% would assist a patient in a few cases, and 20% would assist under a wide variety of circumstances.

Conflict-of-Interest Rules Targeted

People with direct financial conflicts of interest should not be put on Food and Drug Administration advisory committees, a coalition of public interest groups has recommended. Financial conflicts undermine “the public's faith in the fairness and credibility of the panel's work,” the Center for Science in the Public Interest, the National Women's Health Network, the U.S. Cochrane Center Consumer Coalition, and eight other groups said in a letter to Acting FDA Commissioner Lester Crawford, D.V.M., Ph.D. The groups cited the FDA advisory committees that recently reviewed the safety of cyclooxygenase-2 inhibitors, noting that 10 of the 32 members had direct financial conflicts. In addition to prohibiting scientists, physicians, and clinicians with relevant conflicts of interest from serving on advisory committees, the groups also recommended that people with any industry ties make up no more than half of a committee.

Autism Education Costs High

The cost of educating children with autism is almost triple that of educating children who receive no special education services, according to a report from the Government Accountability Office. The GAO reviewed data from the Special Education Expenditure Project funded by the Department of Education and found that the average cost of educating a child with autism–$18,000 in the 1999-2000 school year–“was among the highest per-pupil expenditures for school-age children receiving special education services in public schools.” The report also noted that the number of autistic children given special education services increased by more than 500% in the last decade. Rep. Diane Watson (D-Calif.), who co-commissioned the report, said “that better diagnosis and a broader definition of autism may in part explain the substantial increase in autistic children. However, I believe that further studies should be undertaken of other risk factors, including the correlation between mercury-containing vaccines and higher rates of autism.”

More Drug Treatment Courts Urged

The federal government should spend $30.5 million to increase the number of drug treatment courts nationwide, according to John P. Walters, director of the Office of National Drug Control Policy. “Drug treatment courts … are an effective way of reducing the drug problem in America,” Mr. Walters said in a statement accompanying the release of President Bush's 2005 National Drug Control Strategy. He quoted research showing that, of 17,000 drug program graduates nationwide, only 16.4% had been rearrested and charged with a felony in the first year. “By giving judges the power to refer people to treatment we reduce criminal recidivism, save taxpayer money, and heal those who have become enslaved by drug addiction.” The 1,600 drug courts now operating in the United States emphasize treatment and frequent monitoring instead of prison time.

Groups Push Nondiscrimination Bill

A coalition of mental health groups is lobbying for the passage of the Medicare Mental Health Copayment Equity Act, which would mandate that copayments for mental health services be the same as those for other health services. Currently, there is a 50% copay for mental health services, compared with a 20% copay for most other health care services. “This is discrimination, plain and simple,” James H. Scully Jr., M.D., medical director of the American Psychiatric Association, said in a statement. “Passage of this legislation is long overdue.” The bill's chief sponsors are Rep. Ted Strickland (D-Ohio) and Rep. Tim Murphy (R-Pa.). Other groups supporting the legislation include the American Association for Geriatric Psychiatry and the National Alliance for the Mentally Ill.

Paxil Distribution Halted

The Food and Drug Administration halted distribution of Paxil CR (paroxetine controlled release), an antidepressant made by GlaxoSmithKline, in early March. The agency cited “ongoing concerns about manufacturing quality” but said it did not believe the drug posed significant harm to consumers. During an inspection, the FDA found that “the Paxil CR tablets could split apart and that patients could receive a portion of the tablets that lacks any active ingredient, or alternatively a portion that contains active ingredient and does not have the intended controlled-release effect.” GlaxoSmithKline said in a statement that it agreed the drug posed no immediate threat and urged patients taking the drug to speak with their physicians if they had questions. The company said it was working to resolve the problems as quickly as possible.

Views on Assisted Suicide

More than half of physicians responding to a national survey said that they believe it's ethical to assist a patient in committing suicide. Approximately 57% of the 1,000 physicians said it was ethical, while 39% said it was unethical. The survey was conducted by HCD Research, a marketing and communications research company, and the Louis Finkelstein Institute for Social and Religious Research. In addition, 41% of the physicians surveyed would endorse the legalization of physician-assisted suicide under a wide variety of circumstances, while 30% support its legalization in a few cases and 29% oppose any legalization. Although many physicians support physician-assisted suicide as a public policy, the results were mixed when it came to personally participating in an assisted suicide. About 46% said they would not assist a patient for any reason, 34% would assist a patient in a few cases, and 20% would assist under a wide variety of circumstances.

Conflict-of-Interest Rules Targeted

People with direct financial conflicts of interest should not be put on Food and Drug Administration advisory committees, a coalition of public interest groups has recommended. Financial conflicts undermine “the public's faith in the fairness and credibility of the panel's work,” the Center for Science in the Public Interest, the National Women's Health Network, the U.S. Cochrane Center Consumer Coalition, and eight other groups said in a letter to Acting FDA Commissioner Lester Crawford, D.V.M., Ph.D. The groups cited the FDA advisory committees that recently reviewed the safety of cyclooxygenase-2 inhibitors, noting that 10 of the 32 members had direct financial conflicts. In addition to prohibiting scientists, physicians, and clinicians with relevant conflicts of interest from serving on advisory committees, the groups also recommended that people with any industry ties make up no more than half of a committee.

Autism Education Costs High

The cost of educating children with autism is almost triple that of educating children who receive no special education services, according to a report from the Government Accountability Office. The GAO reviewed data from the Special Education Expenditure Project funded by the Department of Education and found that the average cost of educating a child with autism–$18,000 in the 1999-2000 school year–“was among the highest per-pupil expenditures for school-age children receiving special education services in public schools.” The report also noted that the number of autistic children given special education services increased by more than 500% in the last decade. Rep. Diane Watson (D-Calif.), who co-commissioned the report, said “that better diagnosis and a broader definition of autism may in part explain the substantial increase in autistic children. However, I believe that further studies should be undertaken of other risk factors, including the correlation between mercury-containing vaccines and higher rates of autism.”

More Drug Treatment Courts Urged

The federal government should spend $30.5 million to increase the number of drug treatment courts nationwide, according to John P. Walters, director of the Office of National Drug Control Policy. “Drug treatment courts … are an effective way of reducing the drug problem in America,” Mr. Walters said in a statement accompanying the release of President Bush's 2005 National Drug Control Strategy. He quoted research showing that, of 17,000 drug program graduates nationwide, only 16.4% had been rearrested and charged with a felony in the first year. “By giving judges the power to refer people to treatment we reduce criminal recidivism, save taxpayer money, and heal those who have become enslaved by drug addiction.” The 1,600 drug courts now operating in the United States emphasize treatment and frequent monitoring instead of prison time.

Groups Push Nondiscrimination Bill

A coalition of mental health groups is lobbying for the passage of the Medicare Mental Health Copayment Equity Act, which would mandate that copayments for mental health services be the same as those for other health services. Currently, there is a 50% copay for mental health services, compared with a 20% copay for most other health care services. “This is discrimination, plain and simple,” James H. Scully Jr., M.D., medical director of the American Psychiatric Association, said in a statement. “Passage of this legislation is long overdue.” The bill's chief sponsors are Rep. Ted Strickland (D-Ohio) and Rep. Tim Murphy (R-Pa.). Other groups supporting the legislation include the American Association for Geriatric Psychiatry and the National Alliance for the Mentally Ill.

Paxil Distribution Halted

The Food and Drug Administration halted distribution of Paxil CR (paroxetine controlled release), an antidepressant made by GlaxoSmithKline, in early March. The agency cited “ongoing concerns about manufacturing quality” but said it did not believe the drug posed significant harm to consumers. During an inspection, the FDA found that “the Paxil CR tablets could split apart and that patients could receive a portion of the tablets that lacks any active ingredient, or alternatively a portion that contains active ingredient and does not have the intended controlled-release effect.” GlaxoSmithKline said in a statement that it agreed the drug posed no immediate threat and urged patients taking the drug to speak with their physicians if they had questions. The company said it was working to resolve the problems as quickly as possible.

Views on Assisted Suicide

More than half of physicians responding to a national survey said that they believe it's ethical to assist a patient in committing suicide. Approximately 57% of the 1,000 physicians said it was ethical, while 39% said it was unethical. The survey was conducted by HCD Research, a marketing and communications research company, and the Louis Finkelstein Institute for Social and Religious Research. In addition, 41% of the physicians surveyed would endorse the legalization of physician-assisted suicide under a wide variety of circumstances, while 30% support its legalization in a few cases and 29% oppose any legalization. Although many physicians support physician-assisted suicide as a public policy, the results were mixed when it came to personally participating in an assisted suicide. About 46% said they would not assist a patient for any reason, 34% would assist a patient in a few cases, and 20% would assist under a wide variety of circumstances.

Conflict-of-Interest Rules Targeted

People with direct financial conflicts of interest should not be put on Food and Drug Administration advisory committees, a coalition of public interest groups has recommended. Financial conflicts undermine “the public's faith in the fairness and credibility of the panel's work,” the Center for Science in the Public Interest, the National Women's Health Network, the U.S. Cochrane Center Consumer Coalition, and eight other groups said in a letter to Acting FDA Commissioner Lester Crawford, D.V.M., Ph.D. The groups cited the FDA advisory committees that recently reviewed the safety of cyclooxygenase-2 inhibitors, noting that 10 of the 32 members had direct financial conflicts. In addition to prohibiting scientists, physicians, and clinicians with relevant conflicts of interest from serving on advisory committees, the groups also recommended that people with any industry ties make up no more than half of a committee.

WASHINGTON — Sixty-year-old Janice Ramsey used to have something in common with other Deltona, Fla., residents—she was a small business owner who had health insurance. But 7 years ago, all that changed.

Ms. Ramsey's problems started when she switched health insurance plans. “I purchased a new individual plan because the old one was a little high,” she said at a press briefing sponsored by the American Diabetes Association and Georgetown University. “I had the plan for a year and a half, and then I went to use it.” She needed the coverage to help pay for some blood work, which revealed that she had type 2 diabetes.

Once the claims for the tests were submitted, the insurer took another look at Ms. Ramsey's policy. “The plan said I must have had diabetes before I took their coverage, and they dropped me,” she said. “I was out all the premiums I had [paid].”

She then found coverage through an association health plan that covers members of trade associations and other small groups. But after paying premiums on that plan for 18 months, she had trouble again.

“I found out that the policy I had bought was fraudulent,” she said. “I had to use it because [the doctors] thought I was having a heart attack, and I went in for a catheterization. They didn't pay a dime.”

She was stuck with $23,000 in bills, which she eventually paid back. The plan then went bankrupt, and “they were not licensed in Florida, so the insurance commissioner told me I didn't have a chance to get any money back,” she added.

Since then, Ms. Ramsey has tried to get other coverage, to no avail. “I've contacted a lot of companies, and the answer is the same, 'Sorry, we cannot help you—you have diabetes,'” she said. “They kind of just hang up on you, like you don't even count.” She is hoping that she can hang on for another 5 years, when she'll be eligible for Medicare.

Ms. Ramsey's case is not uncommon, according to Karen Pollitz, project director at the Georgetown University Health Policy Institute and lead author of a report analyzing 850 case studies of diabetes patients who have had problems obtaining or keeping adequate health care coverage. “Even before we began this report, there were studies providing evidence that people who have serious or chronic illnesses are disadvantaged in the insurance system in the U.S. today,” she said.

On average, about 2 million Americans lose their health insurance each month, Ms. Pollitz noted. “Some move right on to the next plan, some are uninsured for a month or two, and some are uninsured for a very long time before they manage to regain their coverage.” But the burden is not spread equally, since people in poor health are twice as likely to be without insurance for a lengthy spell as those in good health.

People with diabetes need coverage that meets the three A's: accessibility, affordability, and adequacy, she continued. “Most people's problems [were caused by] a transition in coverage. People had lost their prior coverage or were about to lose their coverage and had encountered obstacles or penalties that made it harder to move on to their next coverage.”

Ms. Pollitz and colleagues attempted to resolve the patients' insurance problems, with little success. For example, 377 people who had lost their job-based coverage were eligible for coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA), but after they saw what the premiums would be—much more expensive than the premiums they paid on their earlier policies—only 15 people were able to enroll.

Further, 87 people were eligible for individual coverage under the Health Insurance Portability and Accountability Act of 1996 (HIPAA), but only 11 were able to buy the coverage. And 344 people lived in states that had high-risk pools to help the uninsured, but only 7 ended up enrolling. As for Medicaid, although a “large number” of patients had very low incomes—less than $1,000 per month—only 6 ended up being able to enroll in Medicaid, she said.

State high-risk pools were a good example of coverage barriers, according to Ms. Pollitz. Some of the pools were not very accessible; many had waiting lists or were closed to new enrollments. In Florida, where Ms. Ramsey lives, the high-risk pool “has been closed to new enrollees for more than a decade,” she noted.

Affordability is another problem with high-risk pools, since the coverage always costs 50%-100% more than what a private individual insurance policy would cost. For example, in Illinois, premiums can range as high as $1,084 per month, she said. The plans also are age rated, so the costs can grow three to four times in size as beneficiaries approach age 65.

Adequacy is also an issue with high-risk pool policies, Ms. Pollitz said. “High-risk pools often exclude preexisting conditions, so the thing that makes you eligible in the first place is excluded for 6-12 months.” Some pools also have limits on coverage for prescription drugs and mental health care.

On the private insurance side, the high-deductible policies that are increasing in popularity “really hit people with diabetes,” she said, noting that supplies for diabetes patients, such as medications, test strips, and insulin, can range from $350 to $800 per month, depending on whether the patient is experiencing complications. “Those costs really add up.”

The features of health insurance that hurt diabetes patients and others with chronic illnesses “were all adopted for reasons that were perfectly logical,” such as keeping insurance companies solvent, protecting insurers from adverse selection, or being able to offer cheaper premiums. “But those [features] tended to have been adopted one change at a time, so it was hard to step back and take a look at the big picture,” Ms. Pollitz said.

She added that the perspective of chronically ill patients “is a very important one to adopt when looking at proposals to change the health insurance system, because if change won't make it better for people who are sick, then what's the point?”

The report is at www.healthinsuranceinfo.net/diabetes_and_health_insurance.pdf

WASHINGTON — Sixty-year-old Janice Ramsey used to have something in common with other Deltona, Fla., residents—she was a small business owner who had health insurance. But 7 years ago, all that changed.

Ms. Ramsey's problems started when she switched health insurance plans. “I purchased a new individual plan because the old one was a little high,” she said at a press briefing sponsored by the American Diabetes Association and Georgetown University. “I had the plan for a year and a half, and then I went to use it.” She needed the coverage to help pay for some blood work, which revealed that she had type 2 diabetes.

Once the claims for the tests were submitted, the insurer took another look at Ms. Ramsey's policy. “The plan said I must have had diabetes before I took their coverage, and they dropped me,” she said. “I was out all the premiums I had [paid].”

She then found coverage through an association health plan that covers members of trade associations and other small groups. But after paying premiums on that plan for 18 months, she had trouble again.

“I found out that the policy I had bought was fraudulent,” she said. “I had to use it because [the doctors] thought I was having a heart attack, and I went in for a catheterization. They didn't pay a dime.”

She was stuck with $23,000 in bills, which she eventually paid back. The plan then went bankrupt, and “they were not licensed in Florida, so the insurance commissioner told me I didn't have a chance to get any money back,” she added.

Since then, Ms. Ramsey has tried to get other coverage, to no avail. “I've contacted a lot of companies, and the answer is the same, 'Sorry, we cannot help you—you have diabetes,'” she said. “They kind of just hang up on you, like you don't even count.” She is hoping that she can hang on for another 5 years, when she'll be eligible for Medicare.

Ms. Ramsey's case is not uncommon, according to Karen Pollitz, project director at the Georgetown University Health Policy Institute and lead author of a report analyzing 850 case studies of diabetes patients who have had problems obtaining or keeping adequate health care coverage. “Even before we began this report, there were studies providing evidence that people who have serious or chronic illnesses are disadvantaged in the insurance system in the U.S. today,” she said.

On average, about 2 million Americans lose their health insurance each month, Ms. Pollitz noted. “Some move right on to the next plan, some are uninsured for a month or two, and some are uninsured for a very long time before they manage to regain their coverage.” But the burden is not spread equally, since people in poor health are twice as likely to be without insurance for a lengthy spell as those in good health.

People with diabetes need coverage that meets the three A's: accessibility, affordability, and adequacy, she continued. “Most people's problems [were caused by] a transition in coverage. People had lost their prior coverage or were about to lose their coverage and had encountered obstacles or penalties that made it harder to move on to their next coverage.”

Ms. Pollitz and colleagues attempted to resolve the patients' insurance problems, with little success. For example, 377 people who had lost their job-based coverage were eligible for coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA), but after they saw what the premiums would be—much more expensive than the premiums they paid on their earlier policies—only 15 people were able to enroll.

Further, 87 people were eligible for individual coverage under the Health Insurance Portability and Accountability Act of 1996 (HIPAA), but only 11 were able to buy the coverage. And 344 people lived in states that had high-risk pools to help the uninsured, but only 7 ended up enrolling. As for Medicaid, although a “large number” of patients had very low incomes—less than $1,000 per month—only 6 ended up being able to enroll in Medicaid, she said.

State high-risk pools were a good example of coverage barriers, according to Ms. Pollitz. Some of the pools were not very accessible; many had waiting lists or were closed to new enrollments. In Florida, where Ms. Ramsey lives, the high-risk pool “has been closed to new enrollees for more than a decade,” she noted.

Affordability is another problem with high-risk pools, since the coverage always costs 50%-100% more than what a private individual insurance policy would cost. For example, in Illinois, premiums can range as high as $1,084 per month, she said. The plans also are age rated, so the costs can grow three to four times in size as beneficiaries approach age 65.

Adequacy is also an issue with high-risk pool policies, Ms. Pollitz said. “High-risk pools often exclude preexisting conditions, so the thing that makes you eligible in the first place is excluded for 6-12 months.” Some pools also have limits on coverage for prescription drugs and mental health care.

On the private insurance side, the high-deductible policies that are increasing in popularity “really hit people with diabetes,” she said, noting that supplies for diabetes patients, such as medications, test strips, and insulin, can range from $350 to $800 per month, depending on whether the patient is experiencing complications. “Those costs really add up.”

The features of health insurance that hurt diabetes patients and others with chronic illnesses “were all adopted for reasons that were perfectly logical,” such as keeping insurance companies solvent, protecting insurers from adverse selection, or being able to offer cheaper premiums. “But those [features] tended to have been adopted one change at a time, so it was hard to step back and take a look at the big picture,” Ms. Pollitz said.

She added that the perspective of chronically ill patients “is a very important one to adopt when looking at proposals to change the health insurance system, because if change won't make it better for people who are sick, then what's the point?”

The report is at www.healthinsuranceinfo.net/diabetes_and_health_insurance.pdf

WASHINGTON — Sixty-year-old Janice Ramsey used to have something in common with other Deltona, Fla., residents—she was a small business owner who had health insurance. But 7 years ago, all that changed.

Ms. Ramsey's problems started when she switched health insurance plans. “I purchased a new individual plan because the old one was a little high,” she said at a press briefing sponsored by the American Diabetes Association and Georgetown University. “I had the plan for a year and a half, and then I went to use it.” She needed the coverage to help pay for some blood work, which revealed that she had type 2 diabetes.

Once the claims for the tests were submitted, the insurer took another look at Ms. Ramsey's policy. “The plan said I must have had diabetes before I took their coverage, and they dropped me,” she said. “I was out all the premiums I had [paid].”

She then found coverage through an association health plan that covers members of trade associations and other small groups. But after paying premiums on that plan for 18 months, she had trouble again.

“I found out that the policy I had bought was fraudulent,” she said. “I had to use it because [the doctors] thought I was having a heart attack, and I went in for a catheterization. They didn't pay a dime.”

She was stuck with $23,000 in bills, which she eventually paid back. The plan then went bankrupt, and “they were not licensed in Florida, so the insurance commissioner told me I didn't have a chance to get any money back,” she added.

Since then, Ms. Ramsey has tried to get other coverage, to no avail. “I've contacted a lot of companies, and the answer is the same, 'Sorry, we cannot help you—you have diabetes,'” she said. “They kind of just hang up on you, like you don't even count.” She is hoping that she can hang on for another 5 years, when she'll be eligible for Medicare.

Ms. Ramsey's case is not uncommon, according to Karen Pollitz, project director at the Georgetown University Health Policy Institute and lead author of a report analyzing 850 case studies of diabetes patients who have had problems obtaining or keeping adequate health care coverage. “Even before we began this report, there were studies providing evidence that people who have serious or chronic illnesses are disadvantaged in the insurance system in the U.S. today,” she said.

On average, about 2 million Americans lose their health insurance each month, Ms. Pollitz noted. “Some move right on to the next plan, some are uninsured for a month or two, and some are uninsured for a very long time before they manage to regain their coverage.” But the burden is not spread equally, since people in poor health are twice as likely to be without insurance for a lengthy spell as those in good health.

People with diabetes need coverage that meets the three A's: accessibility, affordability, and adequacy, she continued. “Most people's problems [were caused by] a transition in coverage. People had lost their prior coverage or were about to lose their coverage and had encountered obstacles or penalties that made it harder to move on to their next coverage.”

Ms. Pollitz and colleagues attempted to resolve the patients' insurance problems, with little success. For example, 377 people who had lost their job-based coverage were eligible for coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA), but after they saw what the premiums would be—much more expensive than the premiums they paid on their earlier policies—only 15 people were able to enroll.

Further, 87 people were eligible for individual coverage under the Health Insurance Portability and Accountability Act of 1996 (HIPAA), but only 11 were able to buy the coverage. And 344 people lived in states that had high-risk pools to help the uninsured, but only 7 ended up enrolling. As for Medicaid, although a “large number” of patients had very low incomes—less than $1,000 per month—only 6 ended up being able to enroll in Medicaid, she said.

State high-risk pools were a good example of coverage barriers, according to Ms. Pollitz. Some of the pools were not very accessible; many had waiting lists or were closed to new enrollments. In Florida, where Ms. Ramsey lives, the high-risk pool “has been closed to new enrollees for more than a decade,” she noted.

Affordability is another problem with high-risk pools, since the coverage always costs 50%-100% more than what a private individual insurance policy would cost. For example, in Illinois, premiums can range as high as $1,084 per month, she said. The plans also are age rated, so the costs can grow three to four times in size as beneficiaries approach age 65.

Adequacy is also an issue with high-risk pool policies, Ms. Pollitz said. “High-risk pools often exclude preexisting conditions, so the thing that makes you eligible in the first place is excluded for 6-12 months.” Some pools also have limits on coverage for prescription drugs and mental health care.

On the private insurance side, the high-deductible policies that are increasing in popularity “really hit people with diabetes,” she said, noting that supplies for diabetes patients, such as medications, test strips, and insulin, can range from $350 to $800 per month, depending on whether the patient is experiencing complications. “Those costs really add up.”

The features of health insurance that hurt diabetes patients and others with chronic illnesses “were all adopted for reasons that were perfectly logical,” such as keeping insurance companies solvent, protecting insurers from adverse selection, or being able to offer cheaper premiums. “But those [features] tended to have been adopted one change at a time, so it was hard to step back and take a look at the big picture,” Ms. Pollitz said.

She added that the perspective of chronically ill patients “is a very important one to adopt when looking at proposals to change the health insurance system, because if change won't make it better for people who are sick, then what's the point?”

The report is at www.healthinsuranceinfo.net/diabetes_and_health_insurance.pdf

WASHINGTON — People who have suffered adverse outcomes due to treatment with drugs or medical devices may face more delays in suing manufacturers for damages now that federal class-action lawsuit legislation has been signed into law.

The law, known as the Class Action Fairness Act of 2005, would move from state court to federal court any class-action lawsuit in which the amount of damages claimed was more than $5 million and involved citizens in different states. The law also outlines circumstances in which federal courts can decline to hear class-action cases. Proponents of the law, which passed in both the House and Senate in record time, say that it will help decrease the number of “junk lawsuits” that are clogging up the state courts.

“America's employers and consumers are the big winners,” Tom Donohue, president and CEO of the U.S. Chamber of Commerce, said in a statement. “Reform of the class-action lawsuit system will reduce frivolous lawsuits, spur business investment, and help restore sanity to our nation's legal system.”

Critics of the bill, however, say that it will deprive citizens of their right to sue when they are injured by a defective product. The cases ordinarily divided up among 9,200 state judges will be squeezed into the courtrooms of 678 federal judges, said Jillian Aldebron, counsel and communications coordinator for Public Citizen's Congress Watch, a watchdog group. “Even if they are willing to hear the cases, it's going to take years, and these cases take years in state court [already],” she added.

Many physician organizations, including the American Medical Association and the American College of Physicians, have declined to take a stand on the bill; their efforts are more focused on tort reform legislation affecting medical malpractice cases. But a few consumer groups, such as the Campaign for Tobacco-Free Kids, lamented the effect the bill would have on health care-related cases.

“Class-action lawsuits have been an important tool in efforts to hold the tobacco industry accountable,” the group's president, Matthew L. Myers, said in a statement. “This bill will deprive citizens of a state of the right to have their cases heard in their own courts, further overburden the federal courts, and make it more difficult for tobacco companies to be held accountable for years of misleading Americans about the dangers of tobacco.”

Senior citizens' lobby AARP also opposed the bill. “We felt that there wasn't an adequate basis for consumers no longer having the option of bringing a multistate case in state court,” said Larry White, senior legislative representative. “We acknowledge there are abuses on both sides in the system, but when you in essence say that the federal courts will have jurisdiction of these cases … knowing the federal courts oftentimes don't certify those cases, you're in essence saying people who have been genuinely harmed don't have options.”

According to the Bush administration, the law will help consumers. “The bill will remove significant burdens on class-action litigants and provide greater protections for the victims whom the class-action device originally was designed to benefit,” the administration said in a statement. The law would only affect cases filed after the bill was signed, Ms. Aldebron said.

WASHINGTON — People who have suffered adverse outcomes due to treatment with drugs or medical devices may face more delays in suing manufacturers for damages now that federal class-action lawsuit legislation has been signed into law.

The law, known as the Class Action Fairness Act of 2005, would move from state court to federal court any class-action lawsuit in which the amount of damages claimed was more than $5 million and involved citizens in different states. The law also outlines circumstances in which federal courts can decline to hear class-action cases. Proponents of the law, which passed in both the House and Senate in record time, say that it will help decrease the number of “junk lawsuits” that are clogging up the state courts.

“America's employers and consumers are the big winners,” Tom Donohue, president and CEO of the U.S. Chamber of Commerce, said in a statement. “Reform of the class-action lawsuit system will reduce frivolous lawsuits, spur business investment, and help restore sanity to our nation's legal system.”

Critics of the bill, however, say that it will deprive citizens of their right to sue when they are injured by a defective product. The cases ordinarily divided up among 9,200 state judges will be squeezed into the courtrooms of 678 federal judges, said Jillian Aldebron, counsel and communications coordinator for Public Citizen's Congress Watch, a watchdog group. “Even if they are willing to hear the cases, it's going to take years, and these cases take years in state court [already],” she added.

Many physician organizations, including the American Medical Association and the American College of Physicians, have declined to take a stand on the bill; their efforts are more focused on tort reform legislation affecting medical malpractice cases. But a few consumer groups, such as the Campaign for Tobacco-Free Kids, lamented the effect the bill would have on health care-related cases.

“Class-action lawsuits have been an important tool in efforts to hold the tobacco industry accountable,” the group's president, Matthew L. Myers, said in a statement. “This bill will deprive citizens of a state of the right to have their cases heard in their own courts, further overburden the federal courts, and make it more difficult for tobacco companies to be held accountable for years of misleading Americans about the dangers of tobacco.”

Senior citizens' lobby AARP also opposed the bill. “We felt that there wasn't an adequate basis for consumers no longer having the option of bringing a multistate case in state court,” said Larry White, senior legislative representative. “We acknowledge there are abuses on both sides in the system, but when you in essence say that the federal courts will have jurisdiction of these cases … knowing the federal courts oftentimes don't certify those cases, you're in essence saying people who have been genuinely harmed don't have options.”

According to the Bush administration, the law will help consumers. “The bill will remove significant burdens on class-action litigants and provide greater protections for the victims whom the class-action device originally was designed to benefit,” the administration said in a statement. The law would only affect cases filed after the bill was signed, Ms. Aldebron said.

WASHINGTON — People who have suffered adverse outcomes due to treatment with drugs or medical devices may face more delays in suing manufacturers for damages now that federal class-action lawsuit legislation has been signed into law.

The law, known as the Class Action Fairness Act of 2005, would move from state court to federal court any class-action lawsuit in which the amount of damages claimed was more than $5 million and involved citizens in different states. The law also outlines circumstances in which federal courts can decline to hear class-action cases. Proponents of the law, which passed in both the House and Senate in record time, say that it will help decrease the number of “junk lawsuits” that are clogging up the state courts.

“America's employers and consumers are the big winners,” Tom Donohue, president and CEO of the U.S. Chamber of Commerce, said in a statement. “Reform of the class-action lawsuit system will reduce frivolous lawsuits, spur business investment, and help restore sanity to our nation's legal system.”

Critics of the bill, however, say that it will deprive citizens of their right to sue when they are injured by a defective product. The cases ordinarily divided up among 9,200 state judges will be squeezed into the courtrooms of 678 federal judges, said Jillian Aldebron, counsel and communications coordinator for Public Citizen's Congress Watch, a watchdog group. “Even if they are willing to hear the cases, it's going to take years, and these cases take years in state court [already],” she added.

Many physician organizations, including the American Medical Association and the American College of Physicians, have declined to take a stand on the bill; their efforts are more focused on tort reform legislation affecting medical malpractice cases. But a few consumer groups, such as the Campaign for Tobacco-Free Kids, lamented the effect the bill would have on health care-related cases.

“Class-action lawsuits have been an important tool in efforts to hold the tobacco industry accountable,” the group's president, Matthew L. Myers, said in a statement. “This bill will deprive citizens of a state of the right to have their cases heard in their own courts, further overburden the federal courts, and make it more difficult for tobacco companies to be held accountable for years of misleading Americans about the dangers of tobacco.”

Senior citizens' lobby AARP also opposed the bill. “We felt that there wasn't an adequate basis for consumers no longer having the option of bringing a multistate case in state court,” said Larry White, senior legislative representative. “We acknowledge there are abuses on both sides in the system, but when you in essence say that the federal courts will have jurisdiction of these cases … knowing the federal courts oftentimes don't certify those cases, you're in essence saying people who have been genuinely harmed don't have options.”

According to the Bush administration, the law will help consumers. “The bill will remove significant burdens on class-action litigants and provide greater protections for the victims whom the class-action device originally was designed to benefit,” the administration said in a statement. The law would only affect cases filed after the bill was signed, Ms. Aldebron said.

WASHINGTON — Despite their growing popularity, health savings accounts are not a good solution to the problem of rising health care costs, at least not for California state employees and retirees, Fred Buenrostro said at a health care congress sponsored by the Wall Street Journal and CNBC.

Mr. Buenrostro is chief executive officer at the California Public Employees' Retirement System (CalPERS), the second largest health care purchaser in the country. CalPERS, based in Sacramento, provides health benefits to more than 1.2 million employees, retirees, and family members.

In California, out-of-pocket health care premiums have nearly tripled in 5 years, and Gov. Arnold Schwarzenegger (R) is seeking to cut the amount of premium assistance the state gives to employees and retirees. So “CalPERS, like other employers, is hearing the call of consumer-driven health care,” including health savings accounts, Mr. Buenrostro said.

“We are resisting it because we don't want our highway workers, our police officers, our firefighters, our office workers, to switch from our defined benefits health care model to a defined contribution model. We oppose putting our members at risk in such a complex, broken market,” he said.

Under a defined benefit plan like those that CalPERS offers, employers agree to pay for a particular level of benefits, no matter what the cost of the plan is. But under a defined contribution plan, the employer pays only a certain amount toward the cost of an insurance policy; any additional costs must be paid by the enrollee.

So CalPERS is trying other ways to cut health care costs. One technique is to avoid doing business with providers that the plan perceives to be too high cost. “Two years ago, we dropped two big HMO partners because their prices went over the top,” Mr. Buenrostro said.

The plan is also using generic drugs in 95% of cases, and giving members incentives to buy mail-order drugs. CalPERS has extended the length of its PPO contracts to improve its negotiating position, and is encouraging members to use “centers of excellence” for various procedures.

CalPERS also is talking with other purchasers about price inequities of health care in local markets, and plans to convene a conference of purchasers on this issue later in the year, Mr. Buenrostro said.

One big part of controlling CalPERS' costs has been getting the best price for hospital services. Between 2001 and 2003, hospital prices rose 60%, which was “just unaffordable,” he said. CalPERS partnered with California Blue Shield to do an analysis of the costs.

“Blue Shield came up with what was then a shocking discovery: In many cases there was no correlation between price and quality,” he continued. “I thought they were kidding.” For example, they found that the cost of chemotherapy could range from $135,000 to $300,000.

As a result of the analysis, CalPERS notified 38 hospitals and 17 physician practices that they were in danger of being dropped from CalPERS' provider network unless they dropped their costs and agreed to undergo performance assessments. The proposed change would have saved the plan $36 million in the first year and $50 million for the next few years.

After negotiations with the hospitals and scrutiny from the state insurance department, CalPERS ended up dropping 24 hospitals and several physician practices as of January, forcing 32,000 members to switch their primary care physicians. Although the move resulted in complaints from members as well as the California legislature, Mr. Buenrostro has no regrets.

“It will save tens of millions of dollars for our members and the taxpayers [who pay our salaries], and the decision helped us keep our HMO and PPO premium increases for members under 65 at 9.9% without any takeaways or any increases in copays or deductibles,” he said. “We're pretty proud of that.”

WASHINGTON — Despite their growing popularity, health savings accounts are not a good solution to the problem of rising health care costs, at least not for California state employees and retirees, Fred Buenrostro said at a health care congress sponsored by the Wall Street Journal and CNBC.

Mr. Buenrostro is chief executive officer at the California Public Employees' Retirement System (CalPERS), the second largest health care purchaser in the country. CalPERS, based in Sacramento, provides health benefits to more than 1.2 million employees, retirees, and family members.

In California, out-of-pocket health care premiums have nearly tripled in 5 years, and Gov. Arnold Schwarzenegger (R) is seeking to cut the amount of premium assistance the state gives to employees and retirees. So “CalPERS, like other employers, is hearing the call of consumer-driven health care,” including health savings accounts, Mr. Buenrostro said.

“We are resisting it because we don't want our highway workers, our police officers, our firefighters, our office workers, to switch from our defined benefits health care model to a defined contribution model. We oppose putting our members at risk in such a complex, broken market,” he said.

Under a defined benefit plan like those that CalPERS offers, employers agree to pay for a particular level of benefits, no matter what the cost of the plan is. But under a defined contribution plan, the employer pays only a certain amount toward the cost of an insurance policy; any additional costs must be paid by the enrollee.

So CalPERS is trying other ways to cut health care costs. One technique is to avoid doing business with providers that the plan perceives to be too high cost. “Two years ago, we dropped two big HMO partners because their prices went over the top,” Mr. Buenrostro said.

The plan is also using generic drugs in 95% of cases, and giving members incentives to buy mail-order drugs. CalPERS has extended the length of its PPO contracts to improve its negotiating position, and is encouraging members to use “centers of excellence” for various procedures.

CalPERS also is talking with other purchasers about price inequities of health care in local markets, and plans to convene a conference of purchasers on this issue later in the year, Mr. Buenrostro said.

One big part of controlling CalPERS' costs has been getting the best price for hospital services. Between 2001 and 2003, hospital prices rose 60%, which was “just unaffordable,” he said. CalPERS partnered with California Blue Shield to do an analysis of the costs.

“Blue Shield came up with what was then a shocking discovery: In many cases there was no correlation between price and quality,” he continued. “I thought they were kidding.” For example, they found that the cost of chemotherapy could range from $135,000 to $300,000.

As a result of the analysis, CalPERS notified 38 hospitals and 17 physician practices that they were in danger of being dropped from CalPERS' provider network unless they dropped their costs and agreed to undergo performance assessments. The proposed change would have saved the plan $36 million in the first year and $50 million for the next few years.

After negotiations with the hospitals and scrutiny from the state insurance department, CalPERS ended up dropping 24 hospitals and several physician practices as of January, forcing 32,000 members to switch their primary care physicians. Although the move resulted in complaints from members as well as the California legislature, Mr. Buenrostro has no regrets.

“It will save tens of millions of dollars for our members and the taxpayers [who pay our salaries], and the decision helped us keep our HMO and PPO premium increases for members under 65 at 9.9% without any takeaways or any increases in copays or deductibles,” he said. “We're pretty proud of that.”

WASHINGTON — Despite their growing popularity, health savings accounts are not a good solution to the problem of rising health care costs, at least not for California state employees and retirees, Fred Buenrostro said at a health care congress sponsored by the Wall Street Journal and CNBC.

Mr. Buenrostro is chief executive officer at the California Public Employees' Retirement System (CalPERS), the second largest health care purchaser in the country. CalPERS, based in Sacramento, provides health benefits to more than 1.2 million employees, retirees, and family members.

In California, out-of-pocket health care premiums have nearly tripled in 5 years, and Gov. Arnold Schwarzenegger (R) is seeking to cut the amount of premium assistance the state gives to employees and retirees. So “CalPERS, like other employers, is hearing the call of consumer-driven health care,” including health savings accounts, Mr. Buenrostro said.

“We are resisting it because we don't want our highway workers, our police officers, our firefighters, our office workers, to switch from our defined benefits health care model to a defined contribution model. We oppose putting our members at risk in such a complex, broken market,” he said.

Under a defined benefit plan like those that CalPERS offers, employers agree to pay for a particular level of benefits, no matter what the cost of the plan is. But under a defined contribution plan, the employer pays only a certain amount toward the cost of an insurance policy; any additional costs must be paid by the enrollee.

So CalPERS is trying other ways to cut health care costs. One technique is to avoid doing business with providers that the plan perceives to be too high cost. “Two years ago, we dropped two big HMO partners because their prices went over the top,” Mr. Buenrostro said.

The plan is also using generic drugs in 95% of cases, and giving members incentives to buy mail-order drugs. CalPERS has extended the length of its PPO contracts to improve its negotiating position, and is encouraging members to use “centers of excellence” for various procedures.

CalPERS also is talking with other purchasers about price inequities of health care in local markets, and plans to convene a conference of purchasers on this issue later in the year, Mr. Buenrostro said.

One big part of controlling CalPERS' costs has been getting the best price for hospital services. Between 2001 and 2003, hospital prices rose 60%, which was “just unaffordable,” he said. CalPERS partnered with California Blue Shield to do an analysis of the costs.

“Blue Shield came up with what was then a shocking discovery: In many cases there was no correlation between price and quality,” he continued. “I thought they were kidding.” For example, they found that the cost of chemotherapy could range from $135,000 to $300,000.

As a result of the analysis, CalPERS notified 38 hospitals and 17 physician practices that they were in danger of being dropped from CalPERS' provider network unless they dropped their costs and agreed to undergo performance assessments. The proposed change would have saved the plan $36 million in the first year and $50 million for the next few years.

After negotiations with the hospitals and scrutiny from the state insurance department, CalPERS ended up dropping 24 hospitals and several physician practices as of January, forcing 32,000 members to switch their primary care physicians. Although the move resulted in complaints from members as well as the California legislature, Mr. Buenrostro has no regrets.

“It will save tens of millions of dollars for our members and the taxpayers [who pay our salaries], and the decision helped us keep our HMO and PPO premium increases for members under 65 at 9.9% without any takeaways or any increases in copays or deductibles,” he said. “We're pretty proud of that.”

WASHINGTON — Congress is considering giving the Food and Drug Administration more authority over the pharmaceutical companies it deals with, but some legislators are warning against doing too much too fast.

"Changes to drug safety … must be carefully considered to make sure they don't unduly impact patient access," Sen. Mike Enzi (R-Wyo.), chair of the Senate Health, Education, Labor, and Pensions Committee, said at a hearing on FDA oversight. "Congress needs to engage in strong oversight to maintain public confidence in the FDA."

Sandra Kweder, M.D., deputy director of the Office of New Drugs at the FDA's Center for Drug Evaluation and Research, told the Senate committee that in order to ensure drug safety, it would be helpful if the FDA had more clout. She noted that it took a lot of back-and-forth haggling just to get some earlier warnings added to the label.

"The most important lapse [with the safety concerns surrounding Vioxx] was the delay it took to get the information into the labeling; it took over a year," she said. "I think stronger ability to require changes in labeling would be very helpful."

The committee's ranking member, Sen. Edward Kennedy (D-Mass.), also spoke in favor of giving the agency greater labeling authority. "The FDA needs clear authority to require relabeling of a drug after approval once a risk is found," he said. "Negotiations with the drug company should never delay [that]."

Some observers said that although giving the agency more authority over label changes is a good idea, it only goes so far. "We all know product labeling does not change provider behavior very much," said Arthur Levin, director of the Center for Medical Consumers in New York and the consumer representative on the FDA's Drug Safety and Risk Management advisory committee. Even if FDA does get more labeling authority, "we shouldn't count on it protecting the public from harm," Mr. Levin said at a teleconference announcing the release of a new survey on consumer attitudes about the FDA.

The survey of 1,000 adults nationwide was performed by pollster Celinda Lake and sponsored by a coalition of consumer groups. The results showed that only 14% of respondents had a great deal of confidence in the agency's ability to ensure the safety of prescription drugs. And 48% of respondents said they believed the FDA was too influenced by the industries over which it has jurisdiction.

Another subject discussed at the Senate hearing was the secrecy of clinical trial data. "I'd like to emphasize the importance of open access to data from clinical trials, including negative trials and unpublished research," David Fassler, M.D., a child and adolescent psychiatrist in Burlington, Vt., who testified on behalf of the American Academy of Child and Adolescent Psychiatry and the American Psychiatric Association.

In 2004, when Dr. Fassler testified on the question of whether there was a link between selective serotonin reuptake inhibitors (SSRIs) and suicide, "there were only four studies in the published literature on [the use of] SSRIs in adolescents. But I later learned that there were 11 unpublished studies whose results had been submitted to FDA. Parents clearly need access to this kind of evidence."

WASHINGTON — Congress is considering giving the Food and Drug Administration more authority over the pharmaceutical companies it deals with, but some legislators are warning against doing too much too fast.

"Changes to drug safety … must be carefully considered to make sure they don't unduly impact patient access," Sen. Mike Enzi (R-Wyo.), chair of the Senate Health, Education, Labor, and Pensions Committee, said at a hearing on FDA oversight. "Congress needs to engage in strong oversight to maintain public confidence in the FDA."

Sandra Kweder, M.D., deputy director of the Office of New Drugs at the FDA's Center for Drug Evaluation and Research, told the Senate committee that in order to ensure drug safety, it would be helpful if the FDA had more clout. She noted that it took a lot of back-and-forth haggling just to get some earlier warnings added to the label.

"The most important lapse [with the safety concerns surrounding Vioxx] was the delay it took to get the information into the labeling; it took over a year," she said. "I think stronger ability to require changes in labeling would be very helpful."

The committee's ranking member, Sen. Edward Kennedy (D-Mass.), also spoke in favor of giving the agency greater labeling authority. "The FDA needs clear authority to require relabeling of a drug after approval once a risk is found," he said. "Negotiations with the drug company should never delay [that]."

Some observers said that although giving the agency more authority over label changes is a good idea, it only goes so far. "We all know product labeling does not change provider behavior very much," said Arthur Levin, director of the Center for Medical Consumers in New York and the consumer representative on the FDA's Drug Safety and Risk Management advisory committee. Even if FDA does get more labeling authority, "we shouldn't count on it protecting the public from harm," Mr. Levin said at a teleconference announcing the release of a new survey on consumer attitudes about the FDA.

The survey of 1,000 adults nationwide was performed by pollster Celinda Lake and sponsored by a coalition of consumer groups. The results showed that only 14% of respondents had a great deal of confidence in the agency's ability to ensure the safety of prescription drugs. And 48% of respondents said they believed the FDA was too influenced by the industries over which it has jurisdiction.

Another subject discussed at the Senate hearing was the secrecy of clinical trial data. "I'd like to emphasize the importance of open access to data from clinical trials, including negative trials and unpublished research," David Fassler, M.D., a child and adolescent psychiatrist in Burlington, Vt., who testified on behalf of the American Academy of Child and Adolescent Psychiatry and the American Psychiatric Association.

In 2004, when Dr. Fassler testified on the question of whether there was a link between selective serotonin reuptake inhibitors (SSRIs) and suicide, "there were only four studies in the published literature on [the use of] SSRIs in adolescents. But I later learned that there were 11 unpublished studies whose results had been submitted to FDA. Parents clearly need access to this kind of evidence."

WASHINGTON — Congress is considering giving the Food and Drug Administration more authority over the pharmaceutical companies it deals with, but some legislators are warning against doing too much too fast.

"Changes to drug safety … must be carefully considered to make sure they don't unduly impact patient access," Sen. Mike Enzi (R-Wyo.), chair of the Senate Health, Education, Labor, and Pensions Committee, said at a hearing on FDA oversight. "Congress needs to engage in strong oversight to maintain public confidence in the FDA."

Sandra Kweder, M.D., deputy director of the Office of New Drugs at the FDA's Center for Drug Evaluation and Research, told the Senate committee that in order to ensure drug safety, it would be helpful if the FDA had more clout. She noted that it took a lot of back-and-forth haggling just to get some earlier warnings added to the label.

"The most important lapse [with the safety concerns surrounding Vioxx] was the delay it took to get the information into the labeling; it took over a year," she said. "I think stronger ability to require changes in labeling would be very helpful."

The committee's ranking member, Sen. Edward Kennedy (D-Mass.), also spoke in favor of giving the agency greater labeling authority. "The FDA needs clear authority to require relabeling of a drug after approval once a risk is found," he said. "Negotiations with the drug company should never delay [that]."

Some observers said that although giving the agency more authority over label changes is a good idea, it only goes so far. "We all know product labeling does not change provider behavior very much," said Arthur Levin, director of the Center for Medical Consumers in New York and the consumer representative on the FDA's Drug Safety and Risk Management advisory committee. Even if FDA does get more labeling authority, "we shouldn't count on it protecting the public from harm," Mr. Levin said at a teleconference announcing the release of a new survey on consumer attitudes about the FDA.

The survey of 1,000 adults nationwide was performed by pollster Celinda Lake and sponsored by a coalition of consumer groups. The results showed that only 14% of respondents had a great deal of confidence in the agency's ability to ensure the safety of prescription drugs. And 48% of respondents said they believed the FDA was too influenced by the industries over which it has jurisdiction.

Another subject discussed at the Senate hearing was the secrecy of clinical trial data. "I'd like to emphasize the importance of open access to data from clinical trials, including negative trials and unpublished research," David Fassler, M.D., a child and adolescent psychiatrist in Burlington, Vt., who testified on behalf of the American Academy of Child and Adolescent Psychiatry and the American Psychiatric Association.

In 2004, when Dr. Fassler testified on the question of whether there was a link between selective serotonin reuptake inhibitors (SSRIs) and suicide, "there were only four studies in the published literature on [the use of] SSRIs in adolescents. But I later learned that there were 11 unpublished studies whose results had been submitted to FDA. Parents clearly need access to this kind of evidence."

WASHINGTON — The Centers for Medicare and Medicaid Services is experimenting with "pay-for-performance" programs, and observers say it looks as if the agency is really serious about it this time.

"This is not the first time that CMS has come around saying they wanted to pay for performance," Denis Cortese, M.D., said at a health care congress sponsored by the Wall Street Journal and CNBC. "It's the third time that we've been involved in that in 10 years. The other two faded away. This one looks real … and I think Congress is interested in seeing something happen. [But] whether they'll put additional money on the table to make it work has yet to be seen."

Earlier at the same meeting, CMS administrator Mark McClellan, M.D., announced that the agency was implementing its pilot pay-for-performance project. Under the project, 10 large physician group practices will be rewarded by the agency for improving outcomes among Medicare beneficiaries.

The physicians will continue to be paid on a fee-for-service basis as usual, but CMS also will make additional payments based on quality and outcome measures. The agency also will look at the practices' use of preventive services such as influenza and pneumococcal vaccinations, as well as the prevention of complications in patients with chronic illnesses.

Dr. McClellan emphasized that he was not suggesting that physician spending was a major cost problem for Medicare.

"Physicians account for a small fraction of total costs, but doctors have a lot of good ideas and they have the knowledge it takes to get more results for what we actually spend," he said. "I think [pay-for-performance] can potentially save significant amounts of money. At the same time, we're also going to be paying attention to clinical quality, so for diabetic patients, we'll be looking at hemoglobin A1c levels and other well-validated measures of quality. Those will be included along with financial performance measures."

Dr. Cortese, president and CEO, Mayo Clinic, Rochester, Minn., expressed some skepticism about the way pay for performance will be implemented. "I noticed that performance was defined as reducing costs," he said. "I was tempted to ask, 'What happens if the quality goes up and the cost goes up with it?' If the value rises higher than cost, are they really going to pay for it? I don't believe they will."

Other groups also offered mixed reactions. Robert Doherty, senior vice president for governmental affairs and public policy for the American College of Physicians, said CMS should be commended on its efforts to test performance and provide a model to improve care of chronic disease.

The problem is that some of these demonstration projects are limited in scope, he said during a press briefing to release the ACP's 2005 policy framework. For example, the new physician group practice demonstration project "puts all of its eggs" in one basket by focusing solely on large group practices, he said. ACP is advocating that Congress authorize a pilot test of a new model for improving the care of patients with chronic diseases in small and medium-sized practices, where patients with chronic diseases would be encouraged to select a physician as their medical "home."

The Medicare Modernization Act of 2003 authorized a performance-based demonstration project for small physician practices, although the project is limited to just a few hundred practices in four states. "Expanding the program will give CMS a much larger universe of experience and evidence on how to tailor physician incentive programs to be most effective," Mr. Doherty said.

Physicians are not the only recipients of Medicare funds to be affected by the move toward pay-for-performance programs. CMS also is changing to performance-based incentives for its claims processors, beginning in fiscal 2005.

"CMS will develop performance requirements and standards for Medicare administrative contractors through consultations with providers and beneficiaries, which will help ensure that the requirements produce desired results," the agency said in a report submitted to Congress in February.

Jennifer Silverman, Associate Editor, Practice Trends, contributed to this report.

WASHINGTON — The Centers for Medicare and Medicaid Services is experimenting with "pay-for-performance" programs, and observers say it looks as if the agency is really serious about it this time.

"This is not the first time that CMS has come around saying they wanted to pay for performance," Denis Cortese, M.D., said at a health care congress sponsored by the Wall Street Journal and CNBC. "It's the third time that we've been involved in that in 10 years. The other two faded away. This one looks real … and I think Congress is interested in seeing something happen. [But] whether they'll put additional money on the table to make it work has yet to be seen."

Earlier at the same meeting, CMS administrator Mark McClellan, M.D., announced that the agency was implementing its pilot pay-for-performance project. Under the project, 10 large physician group practices will be rewarded by the agency for improving outcomes among Medicare beneficiaries.

The physicians will continue to be paid on a fee-for-service basis as usual, but CMS also will make additional payments based on quality and outcome measures. The agency also will look at the practices' use of preventive services such as influenza and pneumococcal vaccinations, as well as the prevention of complications in patients with chronic illnesses.

Dr. McClellan emphasized that he was not suggesting that physician spending was a major cost problem for Medicare.

"Physicians account for a small fraction of total costs, but doctors have a lot of good ideas and they have the knowledge it takes to get more results for what we actually spend," he said. "I think [pay-for-performance] can potentially save significant amounts of money. At the same time, we're also going to be paying attention to clinical quality, so for diabetic patients, we'll be looking at hemoglobin A1c levels and other well-validated measures of quality. Those will be included along with financial performance measures."

Dr. Cortese, president and CEO, Mayo Clinic, Rochester, Minn., expressed some skepticism about the way pay for performance will be implemented. "I noticed that performance was defined as reducing costs," he said. "I was tempted to ask, 'What happens if the quality goes up and the cost goes up with it?' If the value rises higher than cost, are they really going to pay for it? I don't believe they will."

Other groups also offered mixed reactions. Robert Doherty, senior vice president for governmental affairs and public policy for the American College of Physicians, said CMS should be commended on its efforts to test performance and provide a model to improve care of chronic disease.

The problem is that some of these demonstration projects are limited in scope, he said during a press briefing to release the ACP's 2005 policy framework. For example, the new physician group practice demonstration project "puts all of its eggs" in one basket by focusing solely on large group practices, he said. ACP is advocating that Congress authorize a pilot test of a new model for improving the care of patients with chronic diseases in small and medium-sized practices, where patients with chronic diseases would be encouraged to select a physician as their medical "home."

The Medicare Modernization Act of 2003 authorized a performance-based demonstration project for small physician practices, although the project is limited to just a few hundred practices in four states. "Expanding the program will give CMS a much larger universe of experience and evidence on how to tailor physician incentive programs to be most effective," Mr. Doherty said.

Physicians are not the only recipients of Medicare funds to be affected by the move toward pay-for-performance programs. CMS also is changing to performance-based incentives for its claims processors, beginning in fiscal 2005.

"CMS will develop performance requirements and standards for Medicare administrative contractors through consultations with providers and beneficiaries, which will help ensure that the requirements produce desired results," the agency said in a report submitted to Congress in February.

Jennifer Silverman, Associate Editor, Practice Trends, contributed to this report.

WASHINGTON — The Centers for Medicare and Medicaid Services is experimenting with "pay-for-performance" programs, and observers say it looks as if the agency is really serious about it this time.

"This is not the first time that CMS has come around saying they wanted to pay for performance," Denis Cortese, M.D., said at a health care congress sponsored by the Wall Street Journal and CNBC. "It's the third time that we've been involved in that in 10 years. The other two faded away. This one looks real … and I think Congress is interested in seeing something happen. [But] whether they'll put additional money on the table to make it work has yet to be seen."

Earlier at the same meeting, CMS administrator Mark McClellan, M.D., announced that the agency was implementing its pilot pay-for-performance project. Under the project, 10 large physician group practices will be rewarded by the agency for improving outcomes among Medicare beneficiaries.

The physicians will continue to be paid on a fee-for-service basis as usual, but CMS also will make additional payments based on quality and outcome measures. The agency also will look at the practices' use of preventive services such as influenza and pneumococcal vaccinations, as well as the prevention of complications in patients with chronic illnesses.

Dr. McClellan emphasized that he was not suggesting that physician spending was a major cost problem for Medicare.

"Physicians account for a small fraction of total costs, but doctors have a lot of good ideas and they have the knowledge it takes to get more results for what we actually spend," he said. "I think [pay-for-performance] can potentially save significant amounts of money. At the same time, we're also going to be paying attention to clinical quality, so for diabetic patients, we'll be looking at hemoglobin A1c levels and other well-validated measures of quality. Those will be included along with financial performance measures."

Dr. Cortese, president and CEO, Mayo Clinic, Rochester, Minn., expressed some skepticism about the way pay for performance will be implemented. "I noticed that performance was defined as reducing costs," he said. "I was tempted to ask, 'What happens if the quality goes up and the cost goes up with it?' If the value rises higher than cost, are they really going to pay for it? I don't believe they will."

Other groups also offered mixed reactions. Robert Doherty, senior vice president for governmental affairs and public policy for the American College of Physicians, said CMS should be commended on its efforts to test performance and provide a model to improve care of chronic disease.

The problem is that some of these demonstration projects are limited in scope, he said during a press briefing to release the ACP's 2005 policy framework. For example, the new physician group practice demonstration project "puts all of its eggs" in one basket by focusing solely on large group practices, he said. ACP is advocating that Congress authorize a pilot test of a new model for improving the care of patients with chronic diseases in small and medium-sized practices, where patients with chronic diseases would be encouraged to select a physician as their medical "home."

The Medicare Modernization Act of 2003 authorized a performance-based demonstration project for small physician practices, although the project is limited to just a few hundred practices in four states. "Expanding the program will give CMS a much larger universe of experience and evidence on how to tailor physician incentive programs to be most effective," Mr. Doherty said.

Physicians are not the only recipients of Medicare funds to be affected by the move toward pay-for-performance programs. CMS also is changing to performance-based incentives for its claims processors, beginning in fiscal 2005.

"CMS will develop performance requirements and standards for Medicare administrative contractors through consultations with providers and beneficiaries, which will help ensure that the requirements produce desired results," the agency said in a report submitted to Congress in February.

Jennifer Silverman, Associate Editor, Practice Trends, contributed to this report.

WASHINGTON — Consumer-driven health care may be the “next big thing” in health insurance, but it won't go anywhere until more data on plans, providers, and outcomes become available, George Halvorson said at a health care congress sponsored by the Wall Street Journal and CNBC.

A consumer-driven health plan typically involves a high-deductible health policy combined with a health savings account. Patients initially use money from their account to pay for the first few thousand dollars of health care before the catastrophic policy kicks in.

Although the popularity of such plans may be on the rise, Mr. Halvorson, chairman and CEO of Kaiser Foundation Health Plan, Oakland, Calif., cautioned that many major and expensive trends in care “too often lack scientific backing.” He cited the examples of hormone therapy for heart attack prevention in women, knee surgery to relieve osteoporosis pain, and cyclooxygenase-2 (COX-2) inhibitors for arthritis pain, where the therapy turned out not to work as well as expected.

“Because there's no consistent database in health care, people did not realize this kind of outcome was happening with something that was a very popular treatment,” he said.

Mr. Halvorson recommended that health care executives follow the example of other industries. For example, General Electric instituted a program of “measure, analyze, improve, and control” to weed out errors in its manufacturing process.

Health care doesn't do any of those four steps with any great consistency, Mr. Halvorson continued. “Where does health care get the data that are used? We get it from paper medical records, which are not even complete per patient.” For instance, he said, “we have one patient, four doctors—four unrelated, unconnected, noncommunicative, nonintuitive, noninteractive, too often inaccessible, and often illegible, paper medical records from which to derive the database.”

In addition to the well-known data-collection tools such as electronic medical records (EMRs) and computerized physician order-entry systems, the health care system also should be systematically collecting other information, such as whether patients fill their prescriptions, he said.

Another subject about which more data are needed is the hospital shift change. “It takes an average 43 minutes to do a shift change [and exchange information about patients], and during that time, patients are hitting their buzzer and taking their own steps to the restroom and falling,” Mr. Halvorson said. “By automating that process, you can take the shift change from 43 minutes down to 12 [and] improve patient safety.”

Although the U.S. health care system is better than it's ever been, and the technology is better than it has ever been, “we will not be able to realize the full potential of it until we can get an information flow, and the flow has to come from an EMR,” he said.

WASHINGTON — Consumer-driven health care may be the “next big thing” in health insurance, but it won't go anywhere until more data on plans, providers, and outcomes become available, George Halvorson said at a health care congress sponsored by the Wall Street Journal and CNBC.

A consumer-driven health plan typically involves a high-deductible health policy combined with a health savings account. Patients initially use money from their account to pay for the first few thousand dollars of health care before the catastrophic policy kicks in.

Although the popularity of such plans may be on the rise, Mr. Halvorson, chairman and CEO of Kaiser Foundation Health Plan, Oakland, Calif., cautioned that many major and expensive trends in care “too often lack scientific backing.” He cited the examples of hormone therapy for heart attack prevention in women, knee surgery to relieve osteoporosis pain, and cyclooxygenase-2 (COX-2) inhibitors for arthritis pain, where the therapy turned out not to work as well as expected.

“Because there's no consistent database in health care, people did not realize this kind of outcome was happening with something that was a very popular treatment,” he said.

Mr. Halvorson recommended that health care executives follow the example of other industries. For example, General Electric instituted a program of “measure, analyze, improve, and control” to weed out errors in its manufacturing process.

Health care doesn't do any of those four steps with any great consistency, Mr. Halvorson continued. “Where does health care get the data that are used? We get it from paper medical records, which are not even complete per patient.” For instance, he said, “we have one patient, four doctors—four unrelated, unconnected, noncommunicative, nonintuitive, noninteractive, too often inaccessible, and often illegible, paper medical records from which to derive the database.”

In addition to the well-known data-collection tools such as electronic medical records (EMRs) and computerized physician order-entry systems, the health care system also should be systematically collecting other information, such as whether patients fill their prescriptions, he said.

Another subject about which more data are needed is the hospital shift change. “It takes an average 43 minutes to do a shift change [and exchange information about patients], and during that time, patients are hitting their buzzer and taking their own steps to the restroom and falling,” Mr. Halvorson said. “By automating that process, you can take the shift change from 43 minutes down to 12 [and] improve patient safety.”

Although the U.S. health care system is better than it's ever been, and the technology is better than it has ever been, “we will not be able to realize the full potential of it until we can get an information flow, and the flow has to come from an EMR,” he said.

WASHINGTON — Consumer-driven health care may be the “next big thing” in health insurance, but it won't go anywhere until more data on plans, providers, and outcomes become available, George Halvorson said at a health care congress sponsored by the Wall Street Journal and CNBC.

A consumer-driven health plan typically involves a high-deductible health policy combined with a health savings account. Patients initially use money from their account to pay for the first few thousand dollars of health care before the catastrophic policy kicks in.

Although the popularity of such plans may be on the rise, Mr. Halvorson, chairman and CEO of Kaiser Foundation Health Plan, Oakland, Calif., cautioned that many major and expensive trends in care “too often lack scientific backing.” He cited the examples of hormone therapy for heart attack prevention in women, knee surgery to relieve osteoporosis pain, and cyclooxygenase-2 (COX-2) inhibitors for arthritis pain, where the therapy turned out not to work as well as expected.

“Because there's no consistent database in health care, people did not realize this kind of outcome was happening with something that was a very popular treatment,” he said.

Mr. Halvorson recommended that health care executives follow the example of other industries. For example, General Electric instituted a program of “measure, analyze, improve, and control” to weed out errors in its manufacturing process.

Health care doesn't do any of those four steps with any great consistency, Mr. Halvorson continued. “Where does health care get the data that are used? We get it from paper medical records, which are not even complete per patient.” For instance, he said, “we have one patient, four doctors—four unrelated, unconnected, noncommunicative, nonintuitive, noninteractive, too often inaccessible, and often illegible, paper medical records from which to derive the database.”

In addition to the well-known data-collection tools such as electronic medical records (EMRs) and computerized physician order-entry systems, the health care system also should be systematically collecting other information, such as whether patients fill their prescriptions, he said.

Another subject about which more data are needed is the hospital shift change. “It takes an average 43 minutes to do a shift change [and exchange information about patients], and during that time, patients are hitting their buzzer and taking their own steps to the restroom and falling,” Mr. Halvorson said. “By automating that process, you can take the shift change from 43 minutes down to 12 [and] improve patient safety.”

Although the U.S. health care system is better than it's ever been, and the technology is better than it has ever been, “we will not be able to realize the full potential of it until we can get an information flow, and the flow has to come from an EMR,” he said.