Alicia Ault

CMS Mulls Carotid Stent Change

The Centers for Medicare and Medicaid Services is considering a request from the American College of Cardiology, the Society for Cardiovascular Angiography and Interventions, the Society of Vascular and Interventional Neurology, and the Society for Vascular Medicine to change its current coverage policy for carotid artery stenting. The groups have requested coverage for patients who are at high risk for carotid endarterectomy because of defined anatomic factors, and who have symptomatic carotid artery stenosis of 50%–90% or greater or asymptomatic carotid artery stenosis of greater than or equal to 80%, according to CMS. The requesting organizations said there is a compelling clinical rationale to stent these patients, whose number they estimate to account for 30% of the overall high surgical risk population. The comment period closed March 2; a final decision is expected in August.

Artificial Heart Coverage Proposed

CMS is also proposing to cover artificial hearts implanted as part of clinical studies that meet CMS and Food and Drug Administration standards. The only such device, the AbioCor, made by Abiomed of Danvers, Mass., is being implanted under the FDA's humanitarian device exemption. AbioCor is covered by three insurers, but Medicare payment has been elusive, according to the company. “Our proposal relaxes a long-standing noncoverage policy, gives access to our beneficiaries, and promotes evidence development through FDA-approved studies of this advanced technology,” said CMS Acting Administrator Kerry Weems in a statement. CMS is expected to make a final coverage announcement by May 1.

Jarvik Lipitor Ad Pulled

Pfizer Inc. says that it is withdrawing all Lipitor (atorvastatin) ads that feature Dr. Robert Jarvik as a spokesman. The company defended its use of Dr. Jarvik, calling him a “well-respected heart expert” in a statement. But Pfizer President of Worldwide Pharmaceutical Operations Ian Read also acknowledged that “the way in which we presented Dr. Jarvik in these ads has, unfortunately, led to misimpressions and distractions from our primary goal of encouraging patient and physician dialogue….” The Jarvik ad campaign has been under scrutiny by the House Energy and Commerce Committee. In February that panel released the contract between the physician and Pfizer. According to the terms of the contract, dated April 13, 2006, Dr. Jarvik was due to receive $1.35 million. His work was to include up to 9 12-hour days of work on television, radio, and print ads, plus additional voice over work and 3 days of personal appearances. The committee wants to know whether stunt doubles were employed during the TV ads, which include scenes of Dr. Jarvik rowing. Letters were sent to nine advertising companies that sought records on payments to such alleged doubles, and all records associated with the campaign.

ACC on Vytorin Queries

The American College of Cardiology said it is cooperating with the same House committee mentioned above on its requests to furnish information on funds the college has received from Merck & Co./Schering-Plough Corp., the joint venture that makes and sells Vytorin (ezetimibe/simvastatin). The drug combination has been the subject of intense scrutiny by the committee, largely because of delays in releasing data from the ENHANCE study. The committee said it wanted to know the nature of financial contributions made by the drug companies because the ACC and the American Heart Association had issued statements urging patients not to stop taking Vytorin without talking to their physician first. The committee also requested data from the American Heart Association. Rep. Bart Stupak (D-Mich.), chairman of the oversight and investigations subcommittee, said his panel would look at “how they use this funding and any potential conflicts of interest.” An ACC spokesperson said the organization had delivered boxes of material to the committee, adding that, “industry support in no way affects our policies.”

Don't Blame Technology for Costs

Medical devices and in vitro diagnostics account for a relatively small 6% ($112 billion) of the nation's overall health expenditures and should not be blamed for rising health costs, said officials from the device industry's lobby, AdvaMed, at a briefing in February. The group released what it called one of the first-ever studies to examine device cost trends. The study—paid for by AdvaMed—was conducted by Roland Guy King, a former chief actuary for the Medicare and Medicaid programs. Devices and diagnostics accounted for a steady 6% of expenses from 1989 to 2004. Prices grew more slowly—1.2% annually—than the medical consumer price index, or the consumer price index, according to the study. “The highly competitive medical device marketplace is working and delivering tremendous value both in patient care and in economic terms,” said Stephen J. Ubl, AdvaMed president and CEO.

Pay for Remote Monitoring

At the briefing, AdvaMed officials also said they believe reimbursement for remote monitoring may be added to a Medicare physician fee fix bill when it is taken up later this year. AdvaMed has met with CMS staff to discuss coding for remote management of conditions such as congestive heart failure, cardiac arrhythmia, diabetes, sleep apnea, and epilepsy. The coding discussions may provide the necessary momentum, said Mr. Ubl. The device lobby estimates that remote monitoring would cost $100 million or less over a 5-year period.

CMS Mulls Carotid Stent Change

The Centers for Medicare and Medicaid Services is considering a request from the American College of Cardiology, the Society for Cardiovascular Angiography and Interventions, the Society of Vascular and Interventional Neurology, and the Society for Vascular Medicine to change its current coverage policy for carotid artery stenting. The groups have requested coverage for patients who are at high risk for carotid endarterectomy because of defined anatomic factors, and who have symptomatic carotid artery stenosis of 50%–90% or greater or asymptomatic carotid artery stenosis of greater than or equal to 80%, according to CMS. The requesting organizations said there is a compelling clinical rationale to stent these patients, whose number they estimate to account for 30% of the overall high surgical risk population. The comment period closed March 2; a final decision is expected in August.

Artificial Heart Coverage Proposed

CMS is also proposing to cover artificial hearts implanted as part of clinical studies that meet CMS and Food and Drug Administration standards. The only such device, the AbioCor, made by Abiomed of Danvers, Mass., is being implanted under the FDA's humanitarian device exemption. AbioCor is covered by three insurers, but Medicare payment has been elusive, according to the company. “Our proposal relaxes a long-standing noncoverage policy, gives access to our beneficiaries, and promotes evidence development through FDA-approved studies of this advanced technology,” said CMS Acting Administrator Kerry Weems in a statement. CMS is expected to make a final coverage announcement by May 1.

Jarvik Lipitor Ad Pulled

Pfizer Inc. says that it is withdrawing all Lipitor (atorvastatin) ads that feature Dr. Robert Jarvik as a spokesman. The company defended its use of Dr. Jarvik, calling him a “well-respected heart expert” in a statement. But Pfizer President of Worldwide Pharmaceutical Operations Ian Read also acknowledged that “the way in which we presented Dr. Jarvik in these ads has, unfortunately, led to misimpressions and distractions from our primary goal of encouraging patient and physician dialogue….” The Jarvik ad campaign has been under scrutiny by the House Energy and Commerce Committee. In February that panel released the contract between the physician and Pfizer. According to the terms of the contract, dated April 13, 2006, Dr. Jarvik was due to receive $1.35 million. His work was to include up to 9 12-hour days of work on television, radio, and print ads, plus additional voice over work and 3 days of personal appearances. The committee wants to know whether stunt doubles were employed during the TV ads, which include scenes of Dr. Jarvik rowing. Letters were sent to nine advertising companies that sought records on payments to such alleged doubles, and all records associated with the campaign.

ACC on Vytorin Queries

The American College of Cardiology said it is cooperating with the same House committee mentioned above on its requests to furnish information on funds the college has received from Merck & Co./Schering-Plough Corp., the joint venture that makes and sells Vytorin (ezetimibe/simvastatin). The drug combination has been the subject of intense scrutiny by the committee, largely because of delays in releasing data from the ENHANCE study. The committee said it wanted to know the nature of financial contributions made by the drug companies because the ACC and the American Heart Association had issued statements urging patients not to stop taking Vytorin without talking to their physician first. The committee also requested data from the American Heart Association. Rep. Bart Stupak (D-Mich.), chairman of the oversight and investigations subcommittee, said his panel would look at “how they use this funding and any potential conflicts of interest.” An ACC spokesperson said the organization had delivered boxes of material to the committee, adding that, “industry support in no way affects our policies.”

Don't Blame Technology for Costs

Medical devices and in vitro diagnostics account for a relatively small 6% ($112 billion) of the nation's overall health expenditures and should not be blamed for rising health costs, said officials from the device industry's lobby, AdvaMed, at a briefing in February. The group released what it called one of the first-ever studies to examine device cost trends. The study—paid for by AdvaMed—was conducted by Roland Guy King, a former chief actuary for the Medicare and Medicaid programs. Devices and diagnostics accounted for a steady 6% of expenses from 1989 to 2004. Prices grew more slowly—1.2% annually—than the medical consumer price index, or the consumer price index, according to the study. “The highly competitive medical device marketplace is working and delivering tremendous value both in patient care and in economic terms,” said Stephen J. Ubl, AdvaMed president and CEO.

Pay for Remote Monitoring

At the briefing, AdvaMed officials also said they believe reimbursement for remote monitoring may be added to a Medicare physician fee fix bill when it is taken up later this year. AdvaMed has met with CMS staff to discuss coding for remote management of conditions such as congestive heart failure, cardiac arrhythmia, diabetes, sleep apnea, and epilepsy. The coding discussions may provide the necessary momentum, said Mr. Ubl. The device lobby estimates that remote monitoring would cost $100 million or less over a 5-year period.

CMS Mulls Carotid Stent Change

The Centers for Medicare and Medicaid Services is considering a request from the American College of Cardiology, the Society for Cardiovascular Angiography and Interventions, the Society of Vascular and Interventional Neurology, and the Society for Vascular Medicine to change its current coverage policy for carotid artery stenting. The groups have requested coverage for patients who are at high risk for carotid endarterectomy because of defined anatomic factors, and who have symptomatic carotid artery stenosis of 50%–90% or greater or asymptomatic carotid artery stenosis of greater than or equal to 80%, according to CMS. The requesting organizations said there is a compelling clinical rationale to stent these patients, whose number they estimate to account for 30% of the overall high surgical risk population. The comment period closed March 2; a final decision is expected in August.

Artificial Heart Coverage Proposed

CMS is also proposing to cover artificial hearts implanted as part of clinical studies that meet CMS and Food and Drug Administration standards. The only such device, the AbioCor, made by Abiomed of Danvers, Mass., is being implanted under the FDA's humanitarian device exemption. AbioCor is covered by three insurers, but Medicare payment has been elusive, according to the company. “Our proposal relaxes a long-standing noncoverage policy, gives access to our beneficiaries, and promotes evidence development through FDA-approved studies of this advanced technology,” said CMS Acting Administrator Kerry Weems in a statement. CMS is expected to make a final coverage announcement by May 1.

Jarvik Lipitor Ad Pulled

Pfizer Inc. says that it is withdrawing all Lipitor (atorvastatin) ads that feature Dr. Robert Jarvik as a spokesman. The company defended its use of Dr. Jarvik, calling him a “well-respected heart expert” in a statement. But Pfizer President of Worldwide Pharmaceutical Operations Ian Read also acknowledged that “the way in which we presented Dr. Jarvik in these ads has, unfortunately, led to misimpressions and distractions from our primary goal of encouraging patient and physician dialogue….” The Jarvik ad campaign has been under scrutiny by the House Energy and Commerce Committee. In February that panel released the contract between the physician and Pfizer. According to the terms of the contract, dated April 13, 2006, Dr. Jarvik was due to receive $1.35 million. His work was to include up to 9 12-hour days of work on television, radio, and print ads, plus additional voice over work and 3 days of personal appearances. The committee wants to know whether stunt doubles were employed during the TV ads, which include scenes of Dr. Jarvik rowing. Letters were sent to nine advertising companies that sought records on payments to such alleged doubles, and all records associated with the campaign.

ACC on Vytorin Queries

The American College of Cardiology said it is cooperating with the same House committee mentioned above on its requests to furnish information on funds the college has received from Merck & Co./Schering-Plough Corp., the joint venture that makes and sells Vytorin (ezetimibe/simvastatin). The drug combination has been the subject of intense scrutiny by the committee, largely because of delays in releasing data from the ENHANCE study. The committee said it wanted to know the nature of financial contributions made by the drug companies because the ACC and the American Heart Association had issued statements urging patients not to stop taking Vytorin without talking to their physician first. The committee also requested data from the American Heart Association. Rep. Bart Stupak (D-Mich.), chairman of the oversight and investigations subcommittee, said his panel would look at “how they use this funding and any potential conflicts of interest.” An ACC spokesperson said the organization had delivered boxes of material to the committee, adding that, “industry support in no way affects our policies.”

Don't Blame Technology for Costs

Medical devices and in vitro diagnostics account for a relatively small 6% ($112 billion) of the nation's overall health expenditures and should not be blamed for rising health costs, said officials from the device industry's lobby, AdvaMed, at a briefing in February. The group released what it called one of the first-ever studies to examine device cost trends. The study—paid for by AdvaMed—was conducted by Roland Guy King, a former chief actuary for the Medicare and Medicaid programs. Devices and diagnostics accounted for a steady 6% of expenses from 1989 to 2004. Prices grew more slowly—1.2% annually—than the medical consumer price index, or the consumer price index, according to the study. “The highly competitive medical device marketplace is working and delivering tremendous value both in patient care and in economic terms,” said Stephen J. Ubl, AdvaMed president and CEO.

Pay for Remote Monitoring

At the briefing, AdvaMed officials also said they believe reimbursement for remote monitoring may be added to a Medicare physician fee fix bill when it is taken up later this year. AdvaMed has met with CMS staff to discuss coding for remote management of conditions such as congestive heart failure, cardiac arrhythmia, diabetes, sleep apnea, and epilepsy. The coding discussions may provide the necessary momentum, said Mr. Ubl. The device lobby estimates that remote monitoring would cost $100 million or less over a 5-year period.

The American Gastroenterological Association (AGA) has asked Aetna to defer implementation of a policy that would deny coverage for an attending anesthesiologist during upper or lower endoscopic procedures, including colonoscopies, for average-risk patients.

The AGA said that the policy restricts physician choice and may have an impact on colorectal cancer screening rates.

“AGA members worry that our efforts to increase colorectal cancer screening will be undercut by payers that decrease physicians' control of screening methods, sedation agents, and the presence of medical team members—in this case, anesthesiologists,” said the organization in a letter to Aetna's chief medical officer, Dr. Troyen A. Brennan.

Aetna's policy, which was announced in late 2007, is due to go into effect on April 1.

The insurer has had some discussions with the AGA and with representatives from the American Medical Association, but is “still on target to implement this policy on April 1,” said Aetna spokeswoman Susan Millerick in an interview.

“We continue to meet with medical societies and advocacy groups to explain our position, hear their views, and answer their questions,” said Dr. Brennan in a statement. “We remain open to dialogue on this policy, and additional ways to more closely align care to the evidence base and improve care quality for all of our members,” he added.

The New Jersey Gastroenterology and Endoscopy Society, the New Jersey Society of Colon and Rectal Surgeons, and the New Jersey State Society of Anesthesiologists have also registered their displeasure with the policy, and have discussed suing to stop the implementation.

“We believe that a patient's physician, not his or her insurer, should determine the appropriate sedation agent, provider, and monitoring environment for an endoscopic procedure,” asserted Dr. Matthew Askin, NJGES president, in a statement.

The Aetna policy was outlined in letter to physicians and was also posted on Aetna's Web site. Essentially, monitored anesthesia care will be covered only when patients have “sedation-related risk factors.” Aetna said it would continue to cover conscious sedation.

In reviewing its claims, Aetna found that use of an anesthesiologist varied from a high of 70% of procedures in New York to as low as 6% in Maine. In Chicago, only about 12% of procedures are monitored by an anesthesiologist, said Dr. Robert McDonough, head of Aetna's clinical policy unit, in an interview. “It's hard to believe that there are more persons who have risk factors in New York than in Chicago,” he said.

Without evidence to support monitored sedation in every patient, Aetna saw the need to reduce the delivery of what it viewed as unnecessary services. “Our obligation to our plan sponsors and our members is to contain unnecessary services when we encounter that,” Dr. McDonough said.

He said that Aetna was not trying to interfere with a physician's medical judgment. “We do allow a broad range of discretion for the gastroenterologist.”

After implementation of the new policy, about 20%–30% of the procedures in the New York area would still use an anesthesiologist and be covered, he estimated.

Dr. McDonough also said that no research has shown that having an anesthesiologist in attendance—or not having one—has any impact on screening rates.

Aetna is following WellPoint, Humana, Oxford Health Plans, and HealthAmerica/Coventry, all of which have issued similar policies on monitored anesthesia care.

Although the AGA said it is concerned about these policies, it did note that they are “consistent with the Joint Working Group recommendations from the AGA, ASGE, and ACG.”

The AGA also stated on its Web site that the policies do not prohibit a gastroenterologist or other trained professional from administering deeper sedation with propofol. “Ultimately a qualified health care practitioner should be the decision maker regarding the use and administration of sedation agents in conjunction with the patient,” the AGA stated.

The American Gastroenterological Association (AGA) has asked Aetna to defer implementation of a policy that would deny coverage for an attending anesthesiologist during upper or lower endoscopic procedures, including colonoscopies, for average-risk patients.

The AGA said that the policy restricts physician choice and may have an impact on colorectal cancer screening rates.

“AGA members worry that our efforts to increase colorectal cancer screening will be undercut by payers that decrease physicians' control of screening methods, sedation agents, and the presence of medical team members—in this case, anesthesiologists,” said the organization in a letter to Aetna's chief medical officer, Dr. Troyen A. Brennan.

Aetna's policy, which was announced in late 2007, is due to go into effect on April 1.

The insurer has had some discussions with the AGA and with representatives from the American Medical Association, but is “still on target to implement this policy on April 1,” said Aetna spokeswoman Susan Millerick in an interview.

“We continue to meet with medical societies and advocacy groups to explain our position, hear their views, and answer their questions,” said Dr. Brennan in a statement. “We remain open to dialogue on this policy, and additional ways to more closely align care to the evidence base and improve care quality for all of our members,” he added.

The New Jersey Gastroenterology and Endoscopy Society, the New Jersey Society of Colon and Rectal Surgeons, and the New Jersey State Society of Anesthesiologists have also registered their displeasure with the policy, and have discussed suing to stop the implementation.

“We believe that a patient's physician, not his or her insurer, should determine the appropriate sedation agent, provider, and monitoring environment for an endoscopic procedure,” asserted Dr. Matthew Askin, NJGES president, in a statement.

The Aetna policy was outlined in letter to physicians and was also posted on Aetna's Web site. Essentially, monitored anesthesia care will be covered only when patients have “sedation-related risk factors.” Aetna said it would continue to cover conscious sedation.

In reviewing its claims, Aetna found that use of an anesthesiologist varied from a high of 70% of procedures in New York to as low as 6% in Maine. In Chicago, only about 12% of procedures are monitored by an anesthesiologist, said Dr. Robert McDonough, head of Aetna's clinical policy unit, in an interview. “It's hard to believe that there are more persons who have risk factors in New York than in Chicago,” he said.

Without evidence to support monitored sedation in every patient, Aetna saw the need to reduce the delivery of what it viewed as unnecessary services. “Our obligation to our plan sponsors and our members is to contain unnecessary services when we encounter that,” Dr. McDonough said.

He said that Aetna was not trying to interfere with a physician's medical judgment. “We do allow a broad range of discretion for the gastroenterologist.”

After implementation of the new policy, about 20%–30% of the procedures in the New York area would still use an anesthesiologist and be covered, he estimated.

Dr. McDonough also said that no research has shown that having an anesthesiologist in attendance—or not having one—has any impact on screening rates.

Aetna is following WellPoint, Humana, Oxford Health Plans, and HealthAmerica/Coventry, all of which have issued similar policies on monitored anesthesia care.

Although the AGA said it is concerned about these policies, it did note that they are “consistent with the Joint Working Group recommendations from the AGA, ASGE, and ACG.”

The AGA also stated on its Web site that the policies do not prohibit a gastroenterologist or other trained professional from administering deeper sedation with propofol. “Ultimately a qualified health care practitioner should be the decision maker regarding the use and administration of sedation agents in conjunction with the patient,” the AGA stated.

The American Gastroenterological Association (AGA) has asked Aetna to defer implementation of a policy that would deny coverage for an attending anesthesiologist during upper or lower endoscopic procedures, including colonoscopies, for average-risk patients.

The AGA said that the policy restricts physician choice and may have an impact on colorectal cancer screening rates.

“AGA members worry that our efforts to increase colorectal cancer screening will be undercut by payers that decrease physicians' control of screening methods, sedation agents, and the presence of medical team members—in this case, anesthesiologists,” said the organization in a letter to Aetna's chief medical officer, Dr. Troyen A. Brennan.

Aetna's policy, which was announced in late 2007, is due to go into effect on April 1.

The insurer has had some discussions with the AGA and with representatives from the American Medical Association, but is “still on target to implement this policy on April 1,” said Aetna spokeswoman Susan Millerick in an interview.

“We continue to meet with medical societies and advocacy groups to explain our position, hear their views, and answer their questions,” said Dr. Brennan in a statement. “We remain open to dialogue on this policy, and additional ways to more closely align care to the evidence base and improve care quality for all of our members,” he added.

The New Jersey Gastroenterology and Endoscopy Society, the New Jersey Society of Colon and Rectal Surgeons, and the New Jersey State Society of Anesthesiologists have also registered their displeasure with the policy, and have discussed suing to stop the implementation.

“We believe that a patient's physician, not his or her insurer, should determine the appropriate sedation agent, provider, and monitoring environment for an endoscopic procedure,” asserted Dr. Matthew Askin, NJGES president, in a statement.

The Aetna policy was outlined in letter to physicians and was also posted on Aetna's Web site. Essentially, monitored anesthesia care will be covered only when patients have “sedation-related risk factors.” Aetna said it would continue to cover conscious sedation.

In reviewing its claims, Aetna found that use of an anesthesiologist varied from a high of 70% of procedures in New York to as low as 6% in Maine. In Chicago, only about 12% of procedures are monitored by an anesthesiologist, said Dr. Robert McDonough, head of Aetna's clinical policy unit, in an interview. “It's hard to believe that there are more persons who have risk factors in New York than in Chicago,” he said.

Without evidence to support monitored sedation in every patient, Aetna saw the need to reduce the delivery of what it viewed as unnecessary services. “Our obligation to our plan sponsors and our members is to contain unnecessary services when we encounter that,” Dr. McDonough said.

He said that Aetna was not trying to interfere with a physician's medical judgment. “We do allow a broad range of discretion for the gastroenterologist.”

After implementation of the new policy, about 20%–30% of the procedures in the New York area would still use an anesthesiologist and be covered, he estimated.

Dr. McDonough also said that no research has shown that having an anesthesiologist in attendance—or not having one—has any impact on screening rates.

Aetna is following WellPoint, Humana, Oxford Health Plans, and HealthAmerica/Coventry, all of which have issued similar policies on monitored anesthesia care.

Although the AGA said it is concerned about these policies, it did note that they are “consistent with the Joint Working Group recommendations from the AGA, ASGE, and ACG.”

The AGA also stated on its Web site that the policies do not prohibit a gastroenterologist or other trained professional from administering deeper sedation with propofol. “Ultimately a qualified health care practitioner should be the decision maker regarding the use and administration of sedation agents in conjunction with the patient,” the AGA stated.

Hospitals participating in a Medicare-sponsored, pay-for-performance demonstration project continue to sustain initial gains in quality improvement and have seen a huge decline in costs and mortality for selected conditions over the first 3 years of the project, according to data released by Premier Inc., a hospital performance improvement alliance.

Overall, the median hospital cost per patient dropped by $1,000 in the first 3 years, and the median mortality rate dropped by 1.87%. The project has 250 participating hospitals, and more than 1 million patient records were analyzed.

Premier, which is managing the Centers for Medicare and Medicaid Services-funded Hospital Quality Incentive Demonstration project, estimated that if every hospital in the United States achieved the same benchmarks, there would be 70,000 fewer deaths each year and hospital costs would drop by as much as $4.5 billion a year.

At a briefing to release the results, Mark Wynn, Ph.D., director of payment policy demonstrations at CMS, said that the hospital project is considered one of the agency's primary arguments in favor of value-based purchasing. CMS has been pushing that policy as the most effective way to restructure Medicare reimbursement to reward efficiency and value.

Dr. Wynn acknowledged that the financial incentives have been very small, but even so, there has been significant improvement. “Relatively modest dollars can have huge impacts,” he said.

Dr. Evan Benjamin, chief quality officer for Baystate Health System in Springfield, Mass., agreed that even small financial carrots have an effect. Dr. Benjamin was the lead author of a study looking at earlier data from the improvement project. He and his colleagues found that quality was higher among the 250 hospitals that were given incentives than it was in control hospitals that were required to report their data publicly but were not given pay-for-performance incentives (N. Engl. J. Med. 2007;356:486–96).

There's room for even more improvement, Dr. Benjamin said at the briefing, noting that most of the hospitals started at a relatively high level of quality and that larger financial incentives might push greater gains.

The Hospital Quality Incentive Demonstration project began in October 2003; the data released covered every quarter through June 2007.

Hospitals were given aggregate scores for each of five conditions—acute myocardial infarction, heart failure, coronary artery bypass graft, pneumonia, and hip and knee replacement—based on reporting for 27 process measures. Hospitals with fewer than eight cases per quarter were excluded, and all the data were adjusted using the All Patient Refined-Diagnostic Related Groups (APR-DRG) methodology created by 3M Information Systems.

Overall, hospitals improved by an average 17% on a composite quality score used by the project. Improvements were largest in pneumonia and heart failure. For instance, only 70% of patients were receiving appropriate pneumonia care at the start, but by June 2007, 93% were. For heart failure, the numbers rose from 64% to 93% of patients getting quality care. Savings were also greatest for heart failure, at about $1,339 per case.

There was a continuing downward trend in performance variation among the hospitals, with all moving toward the ideal, said Richard Norling, president and CEO of Premier Inc. For the hospitals that were on target 100% of the time with 100% of patients, costs and mortality were lowest, he said. For instance, the mortality rate for coronary artery bypass graft patients was close to 6% at hospitals that met appropriate care benchmarks in only half the patients or fewer. Mortality was just under 2% for facilities that met those benchmarks in 75%–100% of the patients, Mr. Norling said.

Attaining the goals of the demonstration project required huge cultural shifts and large investments in information systems, according to two hospital executives whose facilities participated in the project. Before the project, the Aurora Health Care system was reactive and was achieving only incremental quality improvement, despite having a culture and leadership that focused on better care, said Dr. Nick Turkal, president and CEO of the Milwaukee-based nonprofit system.

Participation in the demonstration has changed the mind-set to “a pursuit of perfection,” Dr. Turkal said at the briefing. The system's 13 hospitals have 100,000 admissions annually.

Data on meeting the pay-for-performance goals are given to employees every 60 days, and are updated regularly on the system's Web site for the public to see. Mortality and costs are down significantly across the system, but “we're not done yet,” he said.

Improvements are possible regardless of facility size or location, said Dr. Mark Povroznik, director of quality initiatives at United Hospital Center, Clarksburg, W.Va. The 375-bed facility has about 15,000 admissions a year and is facing a large and growing uncompensated care burden, he said at the briefing.

The facility has gone from being among the top 20% in two conditions during the first year to being on track to hitting that mark for four conditions in the upcoming year, said Dr. Povroznik. The payout has been tiny, with an estimated $143,000 in bonuses due for 2007, but the rewards are large in quality improvement, he said.

For instance, the hospital was struggling to meet a “door-to-balloon” time for acute myocardial infarction. Initially, the hospital was hitting a 2-hour mark for only 71% of cases. Now, 100% of eligible cases are given angioplasty within a recommended 90-minute target, Dr. Povroznik said.

The demonstration project has proved that incentives can work, said Dr. Wynn. CMS is tinkering slightly with the project, however. Starting this year, there will be incentives not just for improvement over baseline and for hitting the top 20%, but also for hospitals that show the greatest improvement. A total of $12 million will be available, he said.

Hospitals participating in a Medicare-sponsored, pay-for-performance demonstration project continue to sustain initial gains in quality improvement and have seen a huge decline in costs and mortality for selected conditions over the first 3 years of the project, according to data released by Premier Inc., a hospital performance improvement alliance.

Overall, the median hospital cost per patient dropped by $1,000 in the first 3 years, and the median mortality rate dropped by 1.87%. The project has 250 participating hospitals, and more than 1 million patient records were analyzed.

Premier, which is managing the Centers for Medicare and Medicaid Services-funded Hospital Quality Incentive Demonstration project, estimated that if every hospital in the United States achieved the same benchmarks, there would be 70,000 fewer deaths each year and hospital costs would drop by as much as $4.5 billion a year.

At a briefing to release the results, Mark Wynn, Ph.D., director of payment policy demonstrations at CMS, said that the hospital project is considered one of the agency's primary arguments in favor of value-based purchasing. CMS has been pushing that policy as the most effective way to restructure Medicare reimbursement to reward efficiency and value.

Dr. Wynn acknowledged that the financial incentives have been very small, but even so, there has been significant improvement. “Relatively modest dollars can have huge impacts,” he said.

Dr. Evan Benjamin, chief quality officer for Baystate Health System in Springfield, Mass., agreed that even small financial carrots have an effect. Dr. Benjamin was the lead author of a study looking at earlier data from the improvement project. He and his colleagues found that quality was higher among the 250 hospitals that were given incentives than it was in control hospitals that were required to report their data publicly but were not given pay-for-performance incentives (N. Engl. J. Med. 2007;356:486–96).

There's room for even more improvement, Dr. Benjamin said at the briefing, noting that most of the hospitals started at a relatively high level of quality and that larger financial incentives might push greater gains.

The Hospital Quality Incentive Demonstration project began in October 2003; the data released covered every quarter through June 2007.

Hospitals were given aggregate scores for each of five conditions—acute myocardial infarction, heart failure, coronary artery bypass graft, pneumonia, and hip and knee replacement—based on reporting for 27 process measures. Hospitals with fewer than eight cases per quarter were excluded, and all the data were adjusted using the All Patient Refined-Diagnostic Related Groups (APR-DRG) methodology created by 3M Information Systems.

Overall, hospitals improved by an average 17% on a composite quality score used by the project. Improvements were largest in pneumonia and heart failure. For instance, only 70% of patients were receiving appropriate pneumonia care at the start, but by June 2007, 93% were. For heart failure, the numbers rose from 64% to 93% of patients getting quality care. Savings were also greatest for heart failure, at about $1,339 per case.

There was a continuing downward trend in performance variation among the hospitals, with all moving toward the ideal, said Richard Norling, president and CEO of Premier Inc. For the hospitals that were on target 100% of the time with 100% of patients, costs and mortality were lowest, he said. For instance, the mortality rate for coronary artery bypass graft patients was close to 6% at hospitals that met appropriate care benchmarks in only half the patients or fewer. Mortality was just under 2% for facilities that met those benchmarks in 75%–100% of the patients, Mr. Norling said.

Attaining the goals of the demonstration project required huge cultural shifts and large investments in information systems, according to two hospital executives whose facilities participated in the project. Before the project, the Aurora Health Care system was reactive and was achieving only incremental quality improvement, despite having a culture and leadership that focused on better care, said Dr. Nick Turkal, president and CEO of the Milwaukee-based nonprofit system.

Participation in the demonstration has changed the mind-set to “a pursuit of perfection,” Dr. Turkal said at the briefing. The system's 13 hospitals have 100,000 admissions annually.

Data on meeting the pay-for-performance goals are given to employees every 60 days, and are updated regularly on the system's Web site for the public to see. Mortality and costs are down significantly across the system, but “we're not done yet,” he said.

Improvements are possible regardless of facility size or location, said Dr. Mark Povroznik, director of quality initiatives at United Hospital Center, Clarksburg, W.Va. The 375-bed facility has about 15,000 admissions a year and is facing a large and growing uncompensated care burden, he said at the briefing.

The facility has gone from being among the top 20% in two conditions during the first year to being on track to hitting that mark for four conditions in the upcoming year, said Dr. Povroznik. The payout has been tiny, with an estimated $143,000 in bonuses due for 2007, but the rewards are large in quality improvement, he said.

For instance, the hospital was struggling to meet a “door-to-balloon” time for acute myocardial infarction. Initially, the hospital was hitting a 2-hour mark for only 71% of cases. Now, 100% of eligible cases are given angioplasty within a recommended 90-minute target, Dr. Povroznik said.

The demonstration project has proved that incentives can work, said Dr. Wynn. CMS is tinkering slightly with the project, however. Starting this year, there will be incentives not just for improvement over baseline and for hitting the top 20%, but also for hospitals that show the greatest improvement. A total of $12 million will be available, he said.

Hospitals participating in a Medicare-sponsored, pay-for-performance demonstration project continue to sustain initial gains in quality improvement and have seen a huge decline in costs and mortality for selected conditions over the first 3 years of the project, according to data released by Premier Inc., a hospital performance improvement alliance.

Overall, the median hospital cost per patient dropped by $1,000 in the first 3 years, and the median mortality rate dropped by 1.87%. The project has 250 participating hospitals, and more than 1 million patient records were analyzed.

Premier, which is managing the Centers for Medicare and Medicaid Services-funded Hospital Quality Incentive Demonstration project, estimated that if every hospital in the United States achieved the same benchmarks, there would be 70,000 fewer deaths each year and hospital costs would drop by as much as $4.5 billion a year.

At a briefing to release the results, Mark Wynn, Ph.D., director of payment policy demonstrations at CMS, said that the hospital project is considered one of the agency's primary arguments in favor of value-based purchasing. CMS has been pushing that policy as the most effective way to restructure Medicare reimbursement to reward efficiency and value.

Dr. Wynn acknowledged that the financial incentives have been very small, but even so, there has been significant improvement. “Relatively modest dollars can have huge impacts,” he said.

Dr. Evan Benjamin, chief quality officer for Baystate Health System in Springfield, Mass., agreed that even small financial carrots have an effect. Dr. Benjamin was the lead author of a study looking at earlier data from the improvement project. He and his colleagues found that quality was higher among the 250 hospitals that were given incentives than it was in control hospitals that were required to report their data publicly but were not given pay-for-performance incentives (N. Engl. J. Med. 2007;356:486–96).

There's room for even more improvement, Dr. Benjamin said at the briefing, noting that most of the hospitals started at a relatively high level of quality and that larger financial incentives might push greater gains.

The Hospital Quality Incentive Demonstration project began in October 2003; the data released covered every quarter through June 2007.

Hospitals were given aggregate scores for each of five conditions—acute myocardial infarction, heart failure, coronary artery bypass graft, pneumonia, and hip and knee replacement—based on reporting for 27 process measures. Hospitals with fewer than eight cases per quarter were excluded, and all the data were adjusted using the All Patient Refined-Diagnostic Related Groups (APR-DRG) methodology created by 3M Information Systems.

Overall, hospitals improved by an average 17% on a composite quality score used by the project. Improvements were largest in pneumonia and heart failure. For instance, only 70% of patients were receiving appropriate pneumonia care at the start, but by June 2007, 93% were. For heart failure, the numbers rose from 64% to 93% of patients getting quality care. Savings were also greatest for heart failure, at about $1,339 per case.

There was a continuing downward trend in performance variation among the hospitals, with all moving toward the ideal, said Richard Norling, president and CEO of Premier Inc. For the hospitals that were on target 100% of the time with 100% of patients, costs and mortality were lowest, he said. For instance, the mortality rate for coronary artery bypass graft patients was close to 6% at hospitals that met appropriate care benchmarks in only half the patients or fewer. Mortality was just under 2% for facilities that met those benchmarks in 75%–100% of the patients, Mr. Norling said.

Attaining the goals of the demonstration project required huge cultural shifts and large investments in information systems, according to two hospital executives whose facilities participated in the project. Before the project, the Aurora Health Care system was reactive and was achieving only incremental quality improvement, despite having a culture and leadership that focused on better care, said Dr. Nick Turkal, president and CEO of the Milwaukee-based nonprofit system.

Participation in the demonstration has changed the mind-set to “a pursuit of perfection,” Dr. Turkal said at the briefing. The system's 13 hospitals have 100,000 admissions annually.

Data on meeting the pay-for-performance goals are given to employees every 60 days, and are updated regularly on the system's Web site for the public to see. Mortality and costs are down significantly across the system, but “we're not done yet,” he said.

Improvements are possible regardless of facility size or location, said Dr. Mark Povroznik, director of quality initiatives at United Hospital Center, Clarksburg, W.Va. The 375-bed facility has about 15,000 admissions a year and is facing a large and growing uncompensated care burden, he said at the briefing.

The facility has gone from being among the top 20% in two conditions during the first year to being on track to hitting that mark for four conditions in the upcoming year, said Dr. Povroznik. The payout has been tiny, with an estimated $143,000 in bonuses due for 2007, but the rewards are large in quality improvement, he said.

For instance, the hospital was struggling to meet a “door-to-balloon” time for acute myocardial infarction. Initially, the hospital was hitting a 2-hour mark for only 71% of cases. Now, 100% of eligible cases are given angioplasty within a recommended 90-minute target, Dr. Povroznik said.

The demonstration project has proved that incentives can work, said Dr. Wynn. CMS is tinkering slightly with the project, however. Starting this year, there will be incentives not just for improvement over baseline and for hitting the top 20%, but also for hospitals that show the greatest improvement. A total of $12 million will be available, he said.

NIMH Budget Woes

The National Institute of Mental Health's budget took a severe hit in fiscal year fiscal 2008 and is slated for another in fiscal 2009. In FY07, the agency received a total of about $1.4 billion. For the following year, which began in October 2007, Congress appropriated about $25 million more, but a required across-the-board cut brought the total budget to $1.405 billion–a hair above the previous year's budget. In late January, the White House proposed to essentially keep funding level, at $1.406 billion. This amount is “far below the increase needed to keep pace with medical research inflation,” the National Alliance on Mental Illness noted in a statement.

Mo. Psychologists Eye Prescribing

Legislators in the Missouri House and Senate have introduced bills (H.B. 1739 and S.B. 917) that would create a special designation allowing psychologists to prescribe medication, including Schedule II stimulants and Schedule IV drugs such as benzodiazepines and mood stabilizers, according to the American Psychiatric Association. Psychologists seeking a “prescribing license” would have to complete 400 hours of didactic instruction, complete a 1-year fellowship, and pass the American Psychological Association's national exam. The American Psychiatric Association and three Missouri psychiatric societies have written to every Missouri Senate member stating their opposition to the proposals.

Heart-Brain Link Overlooked

African Americans are not likely to be aware that good cardiac health is linked to good brain health, according to a survey conducted by the Alzheimer's Association and the American Heart Association. Sixty-one percent of survey respondents reported that they were concerned about developing heart disease and 40% said they were concerned about Alzheimer's, but only 6% knew there was a link between cardiovascular disease and dementia. African Americans are at greater risk for diabetes, high blood pressure, and vascular dementia than are other races. Although half of those surveyed knew of their increased cardiovascular risk, only 8% were aware that they were also at increased risk for dementias including Alzheimer's disease. Fewer than 1 in 10 were aware that heart disease, hypertension, diabetes, and hypercholesterolemia were all linked to Alzheimer's. The survey was conducted online in January 2008 with a random sample of 1,210 African Americans and 1,004 adults of other races. The sampling error was plus or minus 3.5%.

Ecstasy Use Continues to Rise

Use of 3,4-methylenedioxymethamphetamine (ecstasy) rose from 2005 to 2006 and would likely continue to increase in 2007, according to the National Survey on Drug Use and Health, conducted by the Substance Abuse and Mental Health Services Administration. About 12 million Americans aged 12 years or older admitted to at least once-in-a-lifetime use of ecstasy in 2005, and 2 million admitted to use in the past year. Twenty-three million had used LSD once, and 6.6 million had used phencyclidine hydrochloride (PCP) once during their lifetime. Use of hallucinogens tended to split along age lines. People aged 18–25 years were more likely to have used LSD, PCP, and ecstasy in the past year than were those aged 26 years or older, or those aged 12–17 years. New hallucinogens such as Salvia divinorum also are emerging, according to SAMHSA. Salvia is a member of the sage family. It grows in Oaxaca, Mexico, but is sold over the Internet. The survey found that 1.8 million people had used Salvia in their lifetime–750,000 in the past year.

Medication Errors Hit 1 in 10

A review of 4,200 charts at six community hospitals in Massachusetts found that 1 in 10 patients admitted to the facilities had suffered a preventable medication injury. Dr. David Bates of Brigham and Women's Hospital, Boston, reviewed the charts and PricewaterhouseCoopers conducted the financial analysis. The study was conducted for the Massachusetts Technology Collaborative and the New England Healthcare Institute, both of which advocate for adoption of computerized physician order entry systems at hospitals. The review found a variety of medication-related errors, including inappropriate use of expensive drugs. About 9% of patients with compromised kidney function received drugs they should not have. The organizations said that by using computer entry, the six hospitals could have saved an average of $154,000 by reducing inappropriate use of expensive drugs, and $47,000 if the system prompted use of oral medications instead of more expensive intravenous formulations. A system costs $2 million to purchase and $435,000 annually to operate, but the investment could be recouped in 26 months, said the organizations.

Top 10 Cost Half a Trillion

The nation's 10 most expensive medical conditions cost about $500 billion to treat in 2005, according to the Agency for Healthcare Research and Quality. Heart disease topped the list at $76 billion, with trauma second at $72 billion, and cancer third at $70 billion. Mental illness, including depression, cost $56 billion, and asthma and chronic obstructive pulmonary disease cost $54 billion. Hypertension cost $42 billion to treat, type 2 diabetes cost $34 billion, and osteoarthritis/joint diseases also cost $34 billion. Back problems and normal childbirth rounded out the list at $32 billion each. The agency counted money spent on office visits, clinic and emergency department use, hospital stays, home health care, and prescription medicines.

NIMH Budget Woes

The National Institute of Mental Health's budget took a severe hit in fiscal year fiscal 2008 and is slated for another in fiscal 2009. In FY07, the agency received a total of about $1.4 billion. For the following year, which began in October 2007, Congress appropriated about $25 million more, but a required across-the-board cut brought the total budget to $1.405 billion–a hair above the previous year's budget. In late January, the White House proposed to essentially keep funding level, at $1.406 billion. This amount is “far below the increase needed to keep pace with medical research inflation,” the National Alliance on Mental Illness noted in a statement.

Mo. Psychologists Eye Prescribing

Legislators in the Missouri House and Senate have introduced bills (H.B. 1739 and S.B. 917) that would create a special designation allowing psychologists to prescribe medication, including Schedule II stimulants and Schedule IV drugs such as benzodiazepines and mood stabilizers, according to the American Psychiatric Association. Psychologists seeking a “prescribing license” would have to complete 400 hours of didactic instruction, complete a 1-year fellowship, and pass the American Psychological Association's national exam. The American Psychiatric Association and three Missouri psychiatric societies have written to every Missouri Senate member stating their opposition to the proposals.

Heart-Brain Link Overlooked

African Americans are not likely to be aware that good cardiac health is linked to good brain health, according to a survey conducted by the Alzheimer's Association and the American Heart Association. Sixty-one percent of survey respondents reported that they were concerned about developing heart disease and 40% said they were concerned about Alzheimer's, but only 6% knew there was a link between cardiovascular disease and dementia. African Americans are at greater risk for diabetes, high blood pressure, and vascular dementia than are other races. Although half of those surveyed knew of their increased cardiovascular risk, only 8% were aware that they were also at increased risk for dementias including Alzheimer's disease. Fewer than 1 in 10 were aware that heart disease, hypertension, diabetes, and hypercholesterolemia were all linked to Alzheimer's. The survey was conducted online in January 2008 with a random sample of 1,210 African Americans and 1,004 adults of other races. The sampling error was plus or minus 3.5%.

Ecstasy Use Continues to Rise

Use of 3,4-methylenedioxymethamphetamine (ecstasy) rose from 2005 to 2006 and would likely continue to increase in 2007, according to the National Survey on Drug Use and Health, conducted by the Substance Abuse and Mental Health Services Administration. About 12 million Americans aged 12 years or older admitted to at least once-in-a-lifetime use of ecstasy in 2005, and 2 million admitted to use in the past year. Twenty-three million had used LSD once, and 6.6 million had used phencyclidine hydrochloride (PCP) once during their lifetime. Use of hallucinogens tended to split along age lines. People aged 18–25 years were more likely to have used LSD, PCP, and ecstasy in the past year than were those aged 26 years or older, or those aged 12–17 years. New hallucinogens such as Salvia divinorum also are emerging, according to SAMHSA. Salvia is a member of the sage family. It grows in Oaxaca, Mexico, but is sold over the Internet. The survey found that 1.8 million people had used Salvia in their lifetime–750,000 in the past year.

Medication Errors Hit 1 in 10

A review of 4,200 charts at six community hospitals in Massachusetts found that 1 in 10 patients admitted to the facilities had suffered a preventable medication injury. Dr. David Bates of Brigham and Women's Hospital, Boston, reviewed the charts and PricewaterhouseCoopers conducted the financial analysis. The study was conducted for the Massachusetts Technology Collaborative and the New England Healthcare Institute, both of which advocate for adoption of computerized physician order entry systems at hospitals. The review found a variety of medication-related errors, including inappropriate use of expensive drugs. About 9% of patients with compromised kidney function received drugs they should not have. The organizations said that by using computer entry, the six hospitals could have saved an average of $154,000 by reducing inappropriate use of expensive drugs, and $47,000 if the system prompted use of oral medications instead of more expensive intravenous formulations. A system costs $2 million to purchase and $435,000 annually to operate, but the investment could be recouped in 26 months, said the organizations.

Top 10 Cost Half a Trillion

The nation's 10 most expensive medical conditions cost about $500 billion to treat in 2005, according to the Agency for Healthcare Research and Quality. Heart disease topped the list at $76 billion, with trauma second at $72 billion, and cancer third at $70 billion. Mental illness, including depression, cost $56 billion, and asthma and chronic obstructive pulmonary disease cost $54 billion. Hypertension cost $42 billion to treat, type 2 diabetes cost $34 billion, and osteoarthritis/joint diseases also cost $34 billion. Back problems and normal childbirth rounded out the list at $32 billion each. The agency counted money spent on office visits, clinic and emergency department use, hospital stays, home health care, and prescription medicines.

NIMH Budget Woes

The National Institute of Mental Health's budget took a severe hit in fiscal year fiscal 2008 and is slated for another in fiscal 2009. In FY07, the agency received a total of about $1.4 billion. For the following year, which began in October 2007, Congress appropriated about $25 million more, but a required across-the-board cut brought the total budget to $1.405 billion–a hair above the previous year's budget. In late January, the White House proposed to essentially keep funding level, at $1.406 billion. This amount is “far below the increase needed to keep pace with medical research inflation,” the National Alliance on Mental Illness noted in a statement.

Mo. Psychologists Eye Prescribing

Legislators in the Missouri House and Senate have introduced bills (H.B. 1739 and S.B. 917) that would create a special designation allowing psychologists to prescribe medication, including Schedule II stimulants and Schedule IV drugs such as benzodiazepines and mood stabilizers, according to the American Psychiatric Association. Psychologists seeking a “prescribing license” would have to complete 400 hours of didactic instruction, complete a 1-year fellowship, and pass the American Psychological Association's national exam. The American Psychiatric Association and three Missouri psychiatric societies have written to every Missouri Senate member stating their opposition to the proposals.

Heart-Brain Link Overlooked

African Americans are not likely to be aware that good cardiac health is linked to good brain health, according to a survey conducted by the Alzheimer's Association and the American Heart Association. Sixty-one percent of survey respondents reported that they were concerned about developing heart disease and 40% said they were concerned about Alzheimer's, but only 6% knew there was a link between cardiovascular disease and dementia. African Americans are at greater risk for diabetes, high blood pressure, and vascular dementia than are other races. Although half of those surveyed knew of their increased cardiovascular risk, only 8% were aware that they were also at increased risk for dementias including Alzheimer's disease. Fewer than 1 in 10 were aware that heart disease, hypertension, diabetes, and hypercholesterolemia were all linked to Alzheimer's. The survey was conducted online in January 2008 with a random sample of 1,210 African Americans and 1,004 adults of other races. The sampling error was plus or minus 3.5%.

Ecstasy Use Continues to Rise

Use of 3,4-methylenedioxymethamphetamine (ecstasy) rose from 2005 to 2006 and would likely continue to increase in 2007, according to the National Survey on Drug Use and Health, conducted by the Substance Abuse and Mental Health Services Administration. About 12 million Americans aged 12 years or older admitted to at least once-in-a-lifetime use of ecstasy in 2005, and 2 million admitted to use in the past year. Twenty-three million had used LSD once, and 6.6 million had used phencyclidine hydrochloride (PCP) once during their lifetime. Use of hallucinogens tended to split along age lines. People aged 18–25 years were more likely to have used LSD, PCP, and ecstasy in the past year than were those aged 26 years or older, or those aged 12–17 years. New hallucinogens such as Salvia divinorum also are emerging, according to SAMHSA. Salvia is a member of the sage family. It grows in Oaxaca, Mexico, but is sold over the Internet. The survey found that 1.8 million people had used Salvia in their lifetime–750,000 in the past year.

Medication Errors Hit 1 in 10

A review of 4,200 charts at six community hospitals in Massachusetts found that 1 in 10 patients admitted to the facilities had suffered a preventable medication injury. Dr. David Bates of Brigham and Women's Hospital, Boston, reviewed the charts and PricewaterhouseCoopers conducted the financial analysis. The study was conducted for the Massachusetts Technology Collaborative and the New England Healthcare Institute, both of which advocate for adoption of computerized physician order entry systems at hospitals. The review found a variety of medication-related errors, including inappropriate use of expensive drugs. About 9% of patients with compromised kidney function received drugs they should not have. The organizations said that by using computer entry, the six hospitals could have saved an average of $154,000 by reducing inappropriate use of expensive drugs, and $47,000 if the system prompted use of oral medications instead of more expensive intravenous formulations. A system costs $2 million to purchase and $435,000 annually to operate, but the investment could be recouped in 26 months, said the organizations.

Top 10 Cost Half a Trillion

The nation's 10 most expensive medical conditions cost about $500 billion to treat in 2005, according to the Agency for Healthcare Research and Quality. Heart disease topped the list at $76 billion, with trauma second at $72 billion, and cancer third at $70 billion. Mental illness, including depression, cost $56 billion, and asthma and chronic obstructive pulmonary disease cost $54 billion. Hypertension cost $42 billion to treat, type 2 diabetes cost $34 billion, and osteoarthritis/joint diseases also cost $34 billion. Back problems and normal childbirth rounded out the list at $32 billion each. The agency counted money spent on office visits, clinic and emergency department use, hospital stays, home health care, and prescription medicines.

WASHINGTON — At least 24 million Americans have diabetes, which cost the nation $174 billion in direct and indirect expenditures in 2007, according to the American Diabetes Association.

The ADA released data that were compiled from a variety of mostly federal sources, including the National Health Interview Survey, the National Health and Nutrition Examination Survey, and the Medical Expenditure Panel Survey. The Lewin Group conducted an analysis of that survey data for the ADA, drawing from the medical, public health, and economics literature.

The report currently does not split costs and incidence according to type of diabetes; those data will be available in a few months, said lead author Tim Dall at a briefing on the analysis for congressional staff members and reporters.

According to the analysis, the cost of the disease has risen 32% since data were last tabulated in 2002. And the $174 billion figure is likely to be conservative because it does not include the approximately 6 million Americans with undiagnosed diabetes, said Ann L. Albright, Ph.D., president of health care and education at the ADA, at the briefing.

The cost estimate also does not include all of the expenses related to diabetes, such as over-the-counter medications or office visits to nonphysician providers other than podiatrists (such as optometrists or dentists).

“The findings reaffirm that diabetes is a public health crisis and its implications are painful and far reaching,” said Dr. Albright, who is also the director of the division of diabetes translation at the Centers for Disease Control and Prevention. “This underscores the importance of early diagnosis and treatment,” she said.

According to the analysis, 17.5 million Americans have been diagnosed with diabetes, up from 12.1 million in 2002. The diabetes population is growing by about 1 million people a year, driven by the aging of the population, more obesity, better detection, decreasing mortality, and growth in minority populations with higher rates of the disease, according to the study (Diabetes Care 2008;31:1–20).

Most people with diabetes are insured, with their costs covered primarily through government programs. About 8.5 million diabetics are Medicare beneficiaries. Two million are uninsured and a third of those are undiagnosed, estimated the authors.

On the medical expenditure side, the total direct costs were an estimated $116 billion, with $27 billion for direct treatment, $58 billion for chronic complications, and $31 billion in “excess” general medical costs. The largest component of medical spending was for inpatient hospitalization, accounting for $58 billion. The inpatient costs for diabetes-related chronic complications—such as neurologic, peripheral vascular, cardiovascular, and renal—are higher than for diabetes-specific hospitalizations, at $2,281, compared with $1,853.

Diagnosed diabetics have medical costs that are two times higher than they would be without the presence of the disease.

Their expenditures average $11,744 a year, of which $6,649 is attributable directly to diabetes.

The indirect costs—pegged at $58 billion—include increased absenteeism, reduced productivity while at work and reduced productivity for those not in the labor force, unemployment from disease-related disability, and lost productive capacity because of early death.

According to the study, there were 284,000 deaths related to diabetes in 2007.

The authors said that while it appears that the disease's burden falls mostly on insurers, employers, and people with diabetes and their families, “the burden is passed along to all of society in the form of higher insurance premiums and taxes, reduced earnings, and reduced standard of living.”

Diabetes affects just under 1 in 10 people, and thus “directly or indirectly touches everyone in society,” they wrote.

WASHINGTON — At least 24 million Americans have diabetes, which cost the nation $174 billion in direct and indirect expenditures in 2007, according to the American Diabetes Association.

The ADA released data that were compiled from a variety of mostly federal sources, including the National Health Interview Survey, the National Health and Nutrition Examination Survey, and the Medical Expenditure Panel Survey. The Lewin Group conducted an analysis of that survey data for the ADA, drawing from the medical, public health, and economics literature.

The report currently does not split costs and incidence according to type of diabetes; those data will be available in a few months, said lead author Tim Dall at a briefing on the analysis for congressional staff members and reporters.

According to the analysis, the cost of the disease has risen 32% since data were last tabulated in 2002. And the $174 billion figure is likely to be conservative because it does not include the approximately 6 million Americans with undiagnosed diabetes, said Ann L. Albright, Ph.D., president of health care and education at the ADA, at the briefing.

The cost estimate also does not include all of the expenses related to diabetes, such as over-the-counter medications or office visits to nonphysician providers other than podiatrists (such as optometrists or dentists).

“The findings reaffirm that diabetes is a public health crisis and its implications are painful and far reaching,” said Dr. Albright, who is also the director of the division of diabetes translation at the Centers for Disease Control and Prevention. “This underscores the importance of early diagnosis and treatment,” she said.

According to the analysis, 17.5 million Americans have been diagnosed with diabetes, up from 12.1 million in 2002. The diabetes population is growing by about 1 million people a year, driven by the aging of the population, more obesity, better detection, decreasing mortality, and growth in minority populations with higher rates of the disease, according to the study (Diabetes Care 2008;31:1–20).

Most people with diabetes are insured, with their costs covered primarily through government programs. About 8.5 million diabetics are Medicare beneficiaries. Two million are uninsured and a third of those are undiagnosed, estimated the authors.

On the medical expenditure side, the total direct costs were an estimated $116 billion, with $27 billion for direct treatment, $58 billion for chronic complications, and $31 billion in “excess” general medical costs. The largest component of medical spending was for inpatient hospitalization, accounting for $58 billion. The inpatient costs for diabetes-related chronic complications—such as neurologic, peripheral vascular, cardiovascular, and renal—are higher than for diabetes-specific hospitalizations, at $2,281, compared with $1,853.

Diagnosed diabetics have medical costs that are two times higher than they would be without the presence of the disease.

Their expenditures average $11,744 a year, of which $6,649 is attributable directly to diabetes.

The indirect costs—pegged at $58 billion—include increased absenteeism, reduced productivity while at work and reduced productivity for those not in the labor force, unemployment from disease-related disability, and lost productive capacity because of early death.

According to the study, there were 284,000 deaths related to diabetes in 2007.

The authors said that while it appears that the disease's burden falls mostly on insurers, employers, and people with diabetes and their families, “the burden is passed along to all of society in the form of higher insurance premiums and taxes, reduced earnings, and reduced standard of living.”

Diabetes affects just under 1 in 10 people, and thus “directly or indirectly touches everyone in society,” they wrote.

WASHINGTON — At least 24 million Americans have diabetes, which cost the nation $174 billion in direct and indirect expenditures in 2007, according to the American Diabetes Association.

The ADA released data that were compiled from a variety of mostly federal sources, including the National Health Interview Survey, the National Health and Nutrition Examination Survey, and the Medical Expenditure Panel Survey. The Lewin Group conducted an analysis of that survey data for the ADA, drawing from the medical, public health, and economics literature.

The report currently does not split costs and incidence according to type of diabetes; those data will be available in a few months, said lead author Tim Dall at a briefing on the analysis for congressional staff members and reporters.

According to the analysis, the cost of the disease has risen 32% since data were last tabulated in 2002. And the $174 billion figure is likely to be conservative because it does not include the approximately 6 million Americans with undiagnosed diabetes, said Ann L. Albright, Ph.D., president of health care and education at the ADA, at the briefing.

The cost estimate also does not include all of the expenses related to diabetes, such as over-the-counter medications or office visits to nonphysician providers other than podiatrists (such as optometrists or dentists).

“The findings reaffirm that diabetes is a public health crisis and its implications are painful and far reaching,” said Dr. Albright, who is also the director of the division of diabetes translation at the Centers for Disease Control and Prevention. “This underscores the importance of early diagnosis and treatment,” she said.

According to the analysis, 17.5 million Americans have been diagnosed with diabetes, up from 12.1 million in 2002. The diabetes population is growing by about 1 million people a year, driven by the aging of the population, more obesity, better detection, decreasing mortality, and growth in minority populations with higher rates of the disease, according to the study (Diabetes Care 2008;31:1–20).

Most people with diabetes are insured, with their costs covered primarily through government programs. About 8.5 million diabetics are Medicare beneficiaries. Two million are uninsured and a third of those are undiagnosed, estimated the authors.

On the medical expenditure side, the total direct costs were an estimated $116 billion, with $27 billion for direct treatment, $58 billion for chronic complications, and $31 billion in “excess” general medical costs. The largest component of medical spending was for inpatient hospitalization, accounting for $58 billion. The inpatient costs for diabetes-related chronic complications—such as neurologic, peripheral vascular, cardiovascular, and renal—are higher than for diabetes-specific hospitalizations, at $2,281, compared with $1,853.

Diagnosed diabetics have medical costs that are two times higher than they would be without the presence of the disease.

Their expenditures average $11,744 a year, of which $6,649 is attributable directly to diabetes.

The indirect costs—pegged at $58 billion—include increased absenteeism, reduced productivity while at work and reduced productivity for those not in the labor force, unemployment from disease-related disability, and lost productive capacity because of early death.

According to the study, there were 284,000 deaths related to diabetes in 2007.

The authors said that while it appears that the disease's burden falls mostly on insurers, employers, and people with diabetes and their families, “the burden is passed along to all of society in the form of higher insurance premiums and taxes, reduced earnings, and reduced standard of living.”

Diabetes affects just under 1 in 10 people, and thus “directly or indirectly touches everyone in society,” they wrote.

One of the nation's largest health care quality coalitions is launching a program that would provide bonuses of up to $100,000 annually to physicians who meet criteria showing that they are offering coordinated care by providing a medical home for their patients.

Announced by Bridges to Excellence in late January, the Medical Home Program has the endorsement of the American College of Physicians (ACP) and the American Academy of Family Physicians (AAFP).

So far, none of BTE's employers or payers have formally committed to the program, Mr. Francois de Brantes, CEO of the coalition, said in an interview. By late spring, however, he expects to "have a couple of exciting announcements."

Dr. Michael Barr, ACP vice president for practice advocacy and improvement, said that the program might spur physicians who are already working on practice improvement, but not documenting it, to start doing so, thereby becoming eligible for the bonuses.

The "patient ultimately benefits from better coordination" of care, Dr. Barr added in an interview.

Dr. de Brantes called the program a vote of confidence in the notion that delivering high-quality coordinated care—as described in the medical home model advocated by the ACP, AAFP, and American Academy of Pediatrics—saves money and improves quality. "We feel pretty confident that the rewards are warranted and that the savings are there to match them," Mr. de Brantes said. "Our research shows that patients who are well taken care of cost less," he said, adding that "the average potential savings per covered life would be approximately $250 a year."

The nonprofit BTE is a coalition of providers, insurers, and employers working together to advance the quality of health care. Members include Aetna, the American Board of Internal Medicine, the Blue Cross and Blue Shield Association, Cisco Systems, IBM, the Leapfrog Group, the National Business Coalition on Health, Partners Healthcare System, and Verizon Communications.

BTE has previously offered pay-for-performance incentives to physicians who use its Physician Office Link, Diabetes Care Link, Cardiac Care Link, and Spine Care Link reporting systems. Physician Office Link was developed in collaboration with the National Committee for Quality Assurance.

With the new Medical Home Program, physicians will be eligible for additional bonus payments of $125 per patient—up to a maximum $100,000 per provider—if they achieve certain performance levels on the Physician Office Link module and at least two of the condition-specific modules.

It's not yet clear when the medical home rewards will start flowing, but the structure is fairly well established, according to Mr. de Brantes.

One of the nation's largest health care quality coalitions is launching a program that would provide bonuses of up to $100,000 annually to physicians who meet criteria showing that they are offering coordinated care by providing a medical home for their patients.

Announced by Bridges to Excellence in late January, the Medical Home Program has the endorsement of the American College of Physicians (ACP) and the American Academy of Family Physicians (AAFP).

So far, none of BTE's employers or payers have formally committed to the program, Mr. Francois de Brantes, CEO of the coalition, said in an interview. By late spring, however, he expects to "have a couple of exciting announcements."

Dr. Michael Barr, ACP vice president for practice advocacy and improvement, said that the program might spur physicians who are already working on practice improvement, but not documenting it, to start doing so, thereby becoming eligible for the bonuses.

The "patient ultimately benefits from better coordination" of care, Dr. Barr added in an interview.

Dr. de Brantes called the program a vote of confidence in the notion that delivering high-quality coordinated care—as described in the medical home model advocated by the ACP, AAFP, and American Academy of Pediatrics—saves money and improves quality. "We feel pretty confident that the rewards are warranted and that the savings are there to match them," Mr. de Brantes said. "Our research shows that patients who are well taken care of cost less," he said, adding that "the average potential savings per covered life would be approximately $250 a year."

The nonprofit BTE is a coalition of providers, insurers, and employers working together to advance the quality of health care. Members include Aetna, the American Board of Internal Medicine, the Blue Cross and Blue Shield Association, Cisco Systems, IBM, the Leapfrog Group, the National Business Coalition on Health, Partners Healthcare System, and Verizon Communications.

BTE has previously offered pay-for-performance incentives to physicians who use its Physician Office Link, Diabetes Care Link, Cardiac Care Link, and Spine Care Link reporting systems. Physician Office Link was developed in collaboration with the National Committee for Quality Assurance.

With the new Medical Home Program, physicians will be eligible for additional bonus payments of $125 per patient—up to a maximum $100,000 per provider—if they achieve certain performance levels on the Physician Office Link module and at least two of the condition-specific modules.

It's not yet clear when the medical home rewards will start flowing, but the structure is fairly well established, according to Mr. de Brantes.

One of the nation's largest health care quality coalitions is launching a program that would provide bonuses of up to $100,000 annually to physicians who meet criteria showing that they are offering coordinated care by providing a medical home for their patients.

Announced by Bridges to Excellence in late January, the Medical Home Program has the endorsement of the American College of Physicians (ACP) and the American Academy of Family Physicians (AAFP).

So far, none of BTE's employers or payers have formally committed to the program, Mr. Francois de Brantes, CEO of the coalition, said in an interview. By late spring, however, he expects to "have a couple of exciting announcements."

Dr. Michael Barr, ACP vice president for practice advocacy and improvement, said that the program might spur physicians who are already working on practice improvement, but not documenting it, to start doing so, thereby becoming eligible for the bonuses.

The "patient ultimately benefits from better coordination" of care, Dr. Barr added in an interview.

Dr. de Brantes called the program a vote of confidence in the notion that delivering high-quality coordinated care—as described in the medical home model advocated by the ACP, AAFP, and American Academy of Pediatrics—saves money and improves quality. "We feel pretty confident that the rewards are warranted and that the savings are there to match them," Mr. de Brantes said. "Our research shows that patients who are well taken care of cost less," he said, adding that "the average potential savings per covered life would be approximately $250 a year."

The nonprofit BTE is a coalition of providers, insurers, and employers working together to advance the quality of health care. Members include Aetna, the American Board of Internal Medicine, the Blue Cross and Blue Shield Association, Cisco Systems, IBM, the Leapfrog Group, the National Business Coalition on Health, Partners Healthcare System, and Verizon Communications.

BTE has previously offered pay-for-performance incentives to physicians who use its Physician Office Link, Diabetes Care Link, Cardiac Care Link, and Spine Care Link reporting systems. Physician Office Link was developed in collaboration with the National Committee for Quality Assurance.

With the new Medical Home Program, physicians will be eligible for additional bonus payments of $125 per patient—up to a maximum $100,000 per provider—if they achieve certain performance levels on the Physician Office Link module and at least two of the condition-specific modules.

It's not yet clear when the medical home rewards will start flowing, but the structure is fairly well established, according to Mr. de Brantes.

The Health and Human Services department has proposed federal e-prescribing standards to be used for Medicare participating physicians, pharmacists, and software vendors.

E-prescribing is not required for participation in the Medicare Part D drug benefit, but under the Medicare Prescription Drug, Improvement, and Modernization Act of 2003—the law that established the benefit—drug plans, physicians, and pharmacists who use electronic prescribing are required to meet the HHS standards.

Some organizations have pushed for required e-prescribing for Medicare participation. The Pharmaceutical Care Management Association (PCMA), which represents pharmacy benefit managers, is spearheading the effort. The organization launched a print and broadcast ad campaign in November that called for adoption of e-prescribing by 2010—the same deadline set by the Institute of Medicine in a report on reducing adverse drug reactions that was issued in July 2006.

The American Health Information Community has also urged the HHS to require e-prescribing for Medicare.

The American Medical Association and other groups oppose a mandate. "From a practical side, a mandate would be premature," Stacey Swartz, Pharm.D., senior director of pharmacy affairs at the National Community Pharmacists Association, said in an interview. "We can see the benefits of it, but we can't ignore that there are costs involved."

The final e-prescribing standards should be issued by April 1.

The Health and Human Services department has proposed federal e-prescribing standards to be used for Medicare participating physicians, pharmacists, and software vendors.

E-prescribing is not required for participation in the Medicare Part D drug benefit, but under the Medicare Prescription Drug, Improvement, and Modernization Act of 2003—the law that established the benefit—drug plans, physicians, and pharmacists who use electronic prescribing are required to meet the HHS standards.

Some organizations have pushed for required e-prescribing for Medicare participation. The Pharmaceutical Care Management Association (PCMA), which represents pharmacy benefit managers, is spearheading the effort. The organization launched a print and broadcast ad campaign in November that called for adoption of e-prescribing by 2010—the same deadline set by the Institute of Medicine in a report on reducing adverse drug reactions that was issued in July 2006.

The American Health Information Community has also urged the HHS to require e-prescribing for Medicare.

The American Medical Association and other groups oppose a mandate. "From a practical side, a mandate would be premature," Stacey Swartz, Pharm.D., senior director of pharmacy affairs at the National Community Pharmacists Association, said in an interview. "We can see the benefits of it, but we can't ignore that there are costs involved."

The final e-prescribing standards should be issued by April 1.

The Health and Human Services department has proposed federal e-prescribing standards to be used for Medicare participating physicians, pharmacists, and software vendors.

E-prescribing is not required for participation in the Medicare Part D drug benefit, but under the Medicare Prescription Drug, Improvement, and Modernization Act of 2003—the law that established the benefit—drug plans, physicians, and pharmacists who use electronic prescribing are required to meet the HHS standards.

Some organizations have pushed for required e-prescribing for Medicare participation. The Pharmaceutical Care Management Association (PCMA), which represents pharmacy benefit managers, is spearheading the effort. The organization launched a print and broadcast ad campaign in November that called for adoption of e-prescribing by 2010—the same deadline set by the Institute of Medicine in a report on reducing adverse drug reactions that was issued in July 2006.

The American Health Information Community has also urged the HHS to require e-prescribing for Medicare.

The American Medical Association and other groups oppose a mandate. "From a practical side, a mandate would be premature," Stacey Swartz, Pharm.D., senior director of pharmacy affairs at the National Community Pharmacists Association, said in an interview. "We can see the benefits of it, but we can't ignore that there are costs involved."

The final e-prescribing standards should be issued by April 1.

Physician-owned specialty hospitals are largely unprepared to handle emergencies and should be more closely tracked by the government to ensure that they comply with Medicare rules, according to a report from the Inspector General of the Department of Health and Human Services.

The IG's office reviewed written policies for managing medical emergencies, staffing schedules, and staffing policies for 8 days at 109 physician-owned facilities that were identified from a list provided by the Centers for Medicare and Medicaid Services. There are an unknown number of physician-owned specialty hospitals, according to the IG, which is urging the CMS to begin compiling a list.

Of the 109 hospitals surveyed, 66 were surgical, 23 were orthopedic, and 20 were cardiac. Eighteen of the cardiac hospitals had an emergency department; only 11 of the 23 orthopedic hospitals and 31 of the surgical hospitals had an ED. Thirty-three of the 109 hospitals were in Texas, 15 were in Louisiana, 9 in Oklahoma, 9 in Kansas, and 8 in South Dakota. The rest were spread across other states.

While half of the physician-owned hospitals surveyed had an emergency department, more than half of those EDs only had a single bed. Only 45% of the EDs had a physician on site at all times.

Ninety-three percent of the hospitals met Medicare staffing requirements: having a registered nurse on duty at all times and a physician on call at all times. Seven hospitals did not have an RN on duty and one did not have a physician on call or on duty on at least 1 of 8 days reviewed. Two-thirds of the hospitals told staff to call 911 in case of emergency.

While transferring a patient with an emergent problem to another hospital's ED is acceptable, it might be a violation of Medicare conditions of participation if a hospital uses 911 to obtain medical assistance to stabilize a patient, according to the IG. Thirty-seven of the 109 hospitals (34%) engaged in that practice, the IG reported.

A hospital also is not in compliance if it uses 911 as a substitute for providing services required by the conditions of Medicare participation, noted the IG.

Almost 25% of the hospitals did not address in written policies the "appraisal of emergencies, initial treatment of emergencies, or referral and transfer of patients," according to the report.

The IG urged the CMS to enforce Medicare staffing requirements. Hospitals should also have information in their written policies on how to manage a medical emergency, said the IG.

The CMS issued a written response that was included in the IG's report. The agency said it agreed with the IG's recommendations and that it would examine current compliance through its routine hospital surveys. As many as 42% of the 109 hospitals would not have been subject to CMS oversight, however, according to the IG. Those facilities were instead accredited by the Joint Commission or the American Osteopathic Association.

Finally, the CMS said it would use its existing authority to require hospitals to have written policies and procedures on managing emergencies, but that it would also consider whether regulatory changes are needed to establish requirements for equipment and staff qualifications.

The report was requested by the Senate Finance Committee, whose leaders—Sen. Chuck Grassley (R-Iowa) and Sen. Max Baucus (D-Mont.)—have a history of seeking restrictions on physician-owned specialty hospitals, and have successfully implemented moratoriums on new facilities.

These senators will likely introduce a new proposal to rein in specialty hospitals this spring, Molly Sandvig, executive director of Physician Hospitals of America, said in an interview.

Ms. Sandvig said that her organization—which represents 108 physician-owned facilities—believed that all hospitals should meet Medicare conditions of participation. However, not every hospital should have an emergency department, she said.

Both the American Hospital Association and the Federation of American Hospitals pounced on the report, saying that it shows physician-owned facilities are a threat to patient safety.

"The report illustrates yet another reason why Congress needs to take action in the best interests of patients and ban physician self-referral to new limited-service hospitals they own and operate," AHA Executive Vice President Rick Pollack said in a statement.

ELSEVIER GLOBAL MEDICAL NEWS

Physician-owned specialty hospitals are largely unprepared to handle emergencies and should be more closely tracked by the government to ensure that they comply with Medicare rules, according to a report from the Inspector General of the Department of Health and Human Services.

The IG's office reviewed written policies for managing medical emergencies, staffing schedules, and staffing policies for 8 days at 109 physician-owned facilities that were identified from a list provided by the Centers for Medicare and Medicaid Services. There are an unknown number of physician-owned specialty hospitals, according to the IG, which is urging the CMS to begin compiling a list.

Of the 109 hospitals surveyed, 66 were surgical, 23 were orthopedic, and 20 were cardiac. Eighteen of the cardiac hospitals had an emergency department; only 11 of the 23 orthopedic hospitals and 31 of the surgical hospitals had an ED. Thirty-three of the 109 hospitals were in Texas, 15 were in Louisiana, 9 in Oklahoma, 9 in Kansas, and 8 in South Dakota. The rest were spread across other states.

While half of the physician-owned hospitals surveyed had an emergency department, more than half of those EDs only had a single bed. Only 45% of the EDs had a physician on site at all times.

Ninety-three percent of the hospitals met Medicare staffing requirements: having a registered nurse on duty at all times and a physician on call at all times. Seven hospitals did not have an RN on duty and one did not have a physician on call or on duty on at least 1 of 8 days reviewed. Two-thirds of the hospitals told staff to call 911 in case of emergency.

While transferring a patient with an emergent problem to another hospital's ED is acceptable, it might be a violation of Medicare conditions of participation if a hospital uses 911 to obtain medical assistance to stabilize a patient, according to the IG. Thirty-seven of the 109 hospitals (34%) engaged in that practice, the IG reported.

A hospital also is not in compliance if it uses 911 as a substitute for providing services required by the conditions of Medicare participation, noted the IG.

Almost 25% of the hospitals did not address in written policies the "appraisal of emergencies, initial treatment of emergencies, or referral and transfer of patients," according to the report.

The IG urged the CMS to enforce Medicare staffing requirements. Hospitals should also have information in their written policies on how to manage a medical emergency, said the IG.

The CMS issued a written response that was included in the IG's report. The agency said it agreed with the IG's recommendations and that it would examine current compliance through its routine hospital surveys. As many as 42% of the 109 hospitals would not have been subject to CMS oversight, however, according to the IG. Those facilities were instead accredited by the Joint Commission or the American Osteopathic Association.

Finally, the CMS said it would use its existing authority to require hospitals to have written policies and procedures on managing emergencies, but that it would also consider whether regulatory changes are needed to establish requirements for equipment and staff qualifications.

The report was requested by the Senate Finance Committee, whose leaders—Sen. Chuck Grassley (R-Iowa) and Sen. Max Baucus (D-Mont.)—have a history of seeking restrictions on physician-owned specialty hospitals, and have successfully implemented moratoriums on new facilities.

These senators will likely introduce a new proposal to rein in specialty hospitals this spring, Molly Sandvig, executive director of Physician Hospitals of America, said in an interview.

Ms. Sandvig said that her organization—which represents 108 physician-owned facilities—believed that all hospitals should meet Medicare conditions of participation. However, not every hospital should have an emergency department, she said.

Both the American Hospital Association and the Federation of American Hospitals pounced on the report, saying that it shows physician-owned facilities are a threat to patient safety.

"The report illustrates yet another reason why Congress needs to take action in the best interests of patients and ban physician self-referral to new limited-service hospitals they own and operate," AHA Executive Vice President Rick Pollack said in a statement.

ELSEVIER GLOBAL MEDICAL NEWS

Physician-owned specialty hospitals are largely unprepared to handle emergencies and should be more closely tracked by the government to ensure that they comply with Medicare rules, according to a report from the Inspector General of the Department of Health and Human Services.

The IG's office reviewed written policies for managing medical emergencies, staffing schedules, and staffing policies for 8 days at 109 physician-owned facilities that were identified from a list provided by the Centers for Medicare and Medicaid Services. There are an unknown number of physician-owned specialty hospitals, according to the IG, which is urging the CMS to begin compiling a list.

Of the 109 hospitals surveyed, 66 were surgical, 23 were orthopedic, and 20 were cardiac. Eighteen of the cardiac hospitals had an emergency department; only 11 of the 23 orthopedic hospitals and 31 of the surgical hospitals had an ED. Thirty-three of the 109 hospitals were in Texas, 15 were in Louisiana, 9 in Oklahoma, 9 in Kansas, and 8 in South Dakota. The rest were spread across other states.

While half of the physician-owned hospitals surveyed had an emergency department, more than half of those EDs only had a single bed. Only 45% of the EDs had a physician on site at all times.

Ninety-three percent of the hospitals met Medicare staffing requirements: having a registered nurse on duty at all times and a physician on call at all times. Seven hospitals did not have an RN on duty and one did not have a physician on call or on duty on at least 1 of 8 days reviewed. Two-thirds of the hospitals told staff to call 911 in case of emergency.

While transferring a patient with an emergent problem to another hospital's ED is acceptable, it might be a violation of Medicare conditions of participation if a hospital uses 911 to obtain medical assistance to stabilize a patient, according to the IG. Thirty-seven of the 109 hospitals (34%) engaged in that practice, the IG reported.

A hospital also is not in compliance if it uses 911 as a substitute for providing services required by the conditions of Medicare participation, noted the IG.

Almost 25% of the hospitals did not address in written policies the "appraisal of emergencies, initial treatment of emergencies, or referral and transfer of patients," according to the report.

The IG urged the CMS to enforce Medicare staffing requirements. Hospitals should also have information in their written policies on how to manage a medical emergency, said the IG.

The CMS issued a written response that was included in the IG's report. The agency said it agreed with the IG's recommendations and that it would examine current compliance through its routine hospital surveys. As many as 42% of the 109 hospitals would not have been subject to CMS oversight, however, according to the IG. Those facilities were instead accredited by the Joint Commission or the American Osteopathic Association.

Finally, the CMS said it would use its existing authority to require hospitals to have written policies and procedures on managing emergencies, but that it would also consider whether regulatory changes are needed to establish requirements for equipment and staff qualifications.

The report was requested by the Senate Finance Committee, whose leaders—Sen. Chuck Grassley (R-Iowa) and Sen. Max Baucus (D-Mont.)—have a history of seeking restrictions on physician-owned specialty hospitals, and have successfully implemented moratoriums on new facilities.

These senators will likely introduce a new proposal to rein in specialty hospitals this spring, Molly Sandvig, executive director of Physician Hospitals of America, said in an interview.

Ms. Sandvig said that her organization—which represents 108 physician-owned facilities—believed that all hospitals should meet Medicare conditions of participation. However, not every hospital should have an emergency department, she said.

Both the American Hospital Association and the Federation of American Hospitals pounced on the report, saying that it shows physician-owned facilities are a threat to patient safety.

"The report illustrates yet another reason why Congress needs to take action in the best interests of patients and ban physician self-referral to new limited-service hospitals they own and operate," AHA Executive Vice President Rick Pollack said in a statement.

ELSEVIER GLOBAL MEDICAL NEWS

Enbrel Sales Investigated

The New Jersey Attorney General's office is investigating Amgen for allegedly promoting Enbrel for off-label uses and for violating privacy laws to get access to potential new patients. On Jan. 14, Attorney General Anne Milgram subpoenaed Amgen for all documents relating to the marketing, sale, and prescription of Enbrel (etanercept) since July 2002. The inquiry follows a lawsuit by two former sales representatives who alleged that the company encouraged them to search physicians' records for patients with mild psoriasis who might be potential candidates for Enbrel therapy. The former employees also claimed to have directly contacted insurers to facilitate reimbursement to physicians for the cost of the biologic. An Amgen spokeswoman said that the company will cooperate fully with the investigation and that the employees' claims "are completely without merit." The company expects salespeople to follow the Code of Conduct. "Amgen does not instruct sales representatives to proactively review patient files or promote off-label for any reason," said the spokeswoman.

HHS Resists Ketek Subpoena

The Department of Health and Human Services has refused to comply with a House Energy and Commerce Committee subpoena of documents related to the March 2007 testimony by Food and Drug Administration Commissioner Andrew von Eschenbach on the approval of Ketek (telithromycin). "There appears to be a continued effort to keep secret the documents we have requested," said Rep. Bart Stupak (D-Mich.), chairman of the committee's oversight and investigation subcommittee. Rep. Stupak spoke at a February subcommittee hearing looking into a Ketek safety study by manufacturer Sanofi-Aventis U.S. LLC and a subsequent FDA inquiry into fraud allegations surrounding that trial. Subcommittee members heard testimony from Senate Finance Committee Chairman Chuck Grassley (R-Iowa) and from FDA and independent investigators that agency officials and Sanofi-Aventis executives ignored warnings that the safety study was riddled with fraud. Both the House panel and the Senate Finance Committee want to determine what the FDA and Sanofi-Aventis knew about the alleged fraud and when. Energy and Commerce Chairman John Dingell (D-Mich.) said he would compel HHS to furnish the documents. An FDA spokeswoman said the agency has given the committee "more than 80,000 pages of information on Ketek," and that the agency has "made every effort to be responsive to the committee's requests."

Reloxin Approval Delayed

FDA has refused to accept the biologics license application filed by Medicis Pharmaceutical Corp. for Reloxin (injectable botulinum toxin type A), according to a Securities and Exchange Commission filing by the company. According to the filing, the application was deemed incomplete because it did not "address how Medicis would fulfill its responsibilities as the manufacturer of the product." The company said the agency cited only administrative, not substantive, problems with the application for approval. Medicis, which licensed Reloxin from the Ipsen Group for commercialization in the United States, Canada, and Japan, "intends to promptly work with the FDA and coordinate its activities with Ipsen to address these administrative issues," according to the filing.

Eyelash Lengthener Sales Halted

Jan Marini Skin Research Inc. has stopped selling its Age Intervention Eyelash Conditioner and Age Intervention Masses of Lashes Performance Mascara in the United States. The company cited its involvement in ongoing patent litigation with Allergan Inc. as one reason for ceasing sales. In a statement, CEO Jan Marini said the company had confidence in the products' safety profile. An older, discontinued product, Age Intervention Eyelash, was the subject of an FDA seizure last November. The agency seized $2 million worth of Age Intervention Eyelash, saying that it was misbranded because it contained bimatoprost, an active ingredient in an FDA-approved drug to treat elevated intraocular pressure. However, Jan Marini had discontinued making or selling Age Intervention Eyelash in 2006. Allergan markets bimatoprost under the trade name Lumigan.

More Action Needed on MRSA

U.S. health care facilities are not doing enough to protect patients from methicillin-resistant Staphylococcus aureus (MRSA) infections, according to an online poll conducted by the Association for Professionals in Infection Control. A majority of infection control professionals (59%) responded that their health care facilities have stepped up efforts to curb MRSA in the past 6 months. But half said their facilities were "not doing as much as [they] could or should" to stop the transmission of MRSA. "MRSA could be beaten if the leadership at hospitals moved more aggressively to adopt strategies proven to protect patients from these virulent infections," said Lisa McGiffert, director of Consumers Union's Stop Hospital Infections campaign. "We need to require hospitals to report their infection rates so the public can see if they are achieving results." Consumers Union has worked to help pass laws in 20 states requiring hospitals to report their patient infection rates, and it supports a federal infection reporting law. The Centers for Disease Control and Prevention estimates that nearly 95,000 patients developed MRSA infections in 2005—most of which were acquired in health care facilities—and almost 19,000 people died.

Enbrel Sales Investigated

The New Jersey Attorney General's office is investigating Amgen for allegedly promoting Enbrel for off-label uses and for violating privacy laws to get access to potential new patients. On Jan. 14, Attorney General Anne Milgram subpoenaed Amgen for all documents relating to the marketing, sale, and prescription of Enbrel (etanercept) since July 2002. The inquiry follows a lawsuit by two former sales representatives who alleged that the company encouraged them to search physicians' records for patients with mild psoriasis who might be potential candidates for Enbrel therapy. The former employees also claimed to have directly contacted insurers to facilitate reimbursement to physicians for the cost of the biologic. An Amgen spokeswoman said that the company will cooperate fully with the investigation and that the employees' claims "are completely without merit." The company expects salespeople to follow the Code of Conduct. "Amgen does not instruct sales representatives to proactively review patient files or promote off-label for any reason," said the spokeswoman.

HHS Resists Ketek Subpoena

The Department of Health and Human Services has refused to comply with a House Energy and Commerce Committee subpoena of documents related to the March 2007 testimony by Food and Drug Administration Commissioner Andrew von Eschenbach on the approval of Ketek (telithromycin). "There appears to be a continued effort to keep secret the documents we have requested," said Rep. Bart Stupak (D-Mich.), chairman of the committee's oversight and investigation subcommittee. Rep. Stupak spoke at a February subcommittee hearing looking into a Ketek safety study by manufacturer Sanofi-Aventis U.S. LLC and a subsequent FDA inquiry into fraud allegations surrounding that trial. Subcommittee members heard testimony from Senate Finance Committee Chairman Chuck Grassley (R-Iowa) and from FDA and independent investigators that agency officials and Sanofi-Aventis executives ignored warnings that the safety study was riddled with fraud. Both the House panel and the Senate Finance Committee want to determine what the FDA and Sanofi-Aventis knew about the alleged fraud and when. Energy and Commerce Chairman John Dingell (D-Mich.) said he would compel HHS to furnish the documents. An FDA spokeswoman said the agency has given the committee "more than 80,000 pages of information on Ketek," and that the agency has "made every effort to be responsive to the committee's requests."

Reloxin Approval Delayed

FDA has refused to accept the biologics license application filed by Medicis Pharmaceutical Corp. for Reloxin (injectable botulinum toxin type A), according to a Securities and Exchange Commission filing by the company. According to the filing, the application was deemed incomplete because it did not "address how Medicis would fulfill its responsibilities as the manufacturer of the product." The company said the agency cited only administrative, not substantive, problems with the application for approval. Medicis, which licensed Reloxin from the Ipsen Group for commercialization in the United States, Canada, and Japan, "intends to promptly work with the FDA and coordinate its activities with Ipsen to address these administrative issues," according to the filing.

Eyelash Lengthener Sales Halted

Jan Marini Skin Research Inc. has stopped selling its Age Intervention Eyelash Conditioner and Age Intervention Masses of Lashes Performance Mascara in the United States. The company cited its involvement in ongoing patent litigation with Allergan Inc. as one reason for ceasing sales. In a statement, CEO Jan Marini said the company had confidence in the products' safety profile. An older, discontinued product, Age Intervention Eyelash, was the subject of an FDA seizure last November. The agency seized $2 million worth of Age Intervention Eyelash, saying that it was misbranded because it contained bimatoprost, an active ingredient in an FDA-approved drug to treat elevated intraocular pressure. However, Jan Marini had discontinued making or selling Age Intervention Eyelash in 2006. Allergan markets bimatoprost under the trade name Lumigan.

More Action Needed on MRSA

U.S. health care facilities are not doing enough to protect patients from methicillin-resistant Staphylococcus aureus (MRSA) infections, according to an online poll conducted by the Association for Professionals in Infection Control. A majority of infection control professionals (59%) responded that their health care facilities have stepped up efforts to curb MRSA in the past 6 months. But half said their facilities were "not doing as much as [they] could or should" to stop the transmission of MRSA. "MRSA could be beaten if the leadership at hospitals moved more aggressively to adopt strategies proven to protect patients from these virulent infections," said Lisa McGiffert, director of Consumers Union's Stop Hospital Infections campaign. "We need to require hospitals to report their infection rates so the public can see if they are achieving results." Consumers Union has worked to help pass laws in 20 states requiring hospitals to report their patient infection rates, and it supports a federal infection reporting law. The Centers for Disease Control and Prevention estimates that nearly 95,000 patients developed MRSA infections in 2005—most of which were acquired in health care facilities—and almost 19,000 people died.

Enbrel Sales Investigated

The New Jersey Attorney General's office is investigating Amgen for allegedly promoting Enbrel for off-label uses and for violating privacy laws to get access to potential new patients. On Jan. 14, Attorney General Anne Milgram subpoenaed Amgen for all documents relating to the marketing, sale, and prescription of Enbrel (etanercept) since July 2002. The inquiry follows a lawsuit by two former sales representatives who alleged that the company encouraged them to search physicians' records for patients with mild psoriasis who might be potential candidates for Enbrel therapy. The former employees also claimed to have directly contacted insurers to facilitate reimbursement to physicians for the cost of the biologic. An Amgen spokeswoman said that the company will cooperate fully with the investigation and that the employees' claims "are completely without merit." The company expects salespeople to follow the Code of Conduct. "Amgen does not instruct sales representatives to proactively review patient files or promote off-label for any reason," said the spokeswoman.

HHS Resists Ketek Subpoena

The Department of Health and Human Services has refused to comply with a House Energy and Commerce Committee subpoena of documents related to the March 2007 testimony by Food and Drug Administration Commissioner Andrew von Eschenbach on the approval of Ketek (telithromycin). "There appears to be a continued effort to keep secret the documents we have requested," said Rep. Bart Stupak (D-Mich.), chairman of the committee's oversight and investigation subcommittee. Rep. Stupak spoke at a February subcommittee hearing looking into a Ketek safety study by manufacturer Sanofi-Aventis U.S. LLC and a subsequent FDA inquiry into fraud allegations surrounding that trial. Subcommittee members heard testimony from Senate Finance Committee Chairman Chuck Grassley (R-Iowa) and from FDA and independent investigators that agency officials and Sanofi-Aventis executives ignored warnings that the safety study was riddled with fraud. Both the House panel and the Senate Finance Committee want to determine what the FDA and Sanofi-Aventis knew about the alleged fraud and when. Energy and Commerce Chairman John Dingell (D-Mich.) said he would compel HHS to furnish the documents. An FDA spokeswoman said the agency has given the committee "more than 80,000 pages of information on Ketek," and that the agency has "made every effort to be responsive to the committee's requests."

Reloxin Approval Delayed

FDA has refused to accept the biologics license application filed by Medicis Pharmaceutical Corp. for Reloxin (injectable botulinum toxin type A), according to a Securities and Exchange Commission filing by the company. According to the filing, the application was deemed incomplete because it did not "address how Medicis would fulfill its responsibilities as the manufacturer of the product." The company said the agency cited only administrative, not substantive, problems with the application for approval. Medicis, which licensed Reloxin from the Ipsen Group for commercialization in the United States, Canada, and Japan, "intends to promptly work with the FDA and coordinate its activities with Ipsen to address these administrative issues," according to the filing.

Eyelash Lengthener Sales Halted

Jan Marini Skin Research Inc. has stopped selling its Age Intervention Eyelash Conditioner and Age Intervention Masses of Lashes Performance Mascara in the United States. The company cited its involvement in ongoing patent litigation with Allergan Inc. as one reason for ceasing sales. In a statement, CEO Jan Marini said the company had confidence in the products' safety profile. An older, discontinued product, Age Intervention Eyelash, was the subject of an FDA seizure last November. The agency seized $2 million worth of Age Intervention Eyelash, saying that it was misbranded because it contained bimatoprost, an active ingredient in an FDA-approved drug to treat elevated intraocular pressure. However, Jan Marini had discontinued making or selling Age Intervention Eyelash in 2006. Allergan markets bimatoprost under the trade name Lumigan.

More Action Needed on MRSA

U.S. health care facilities are not doing enough to protect patients from methicillin-resistant Staphylococcus aureus (MRSA) infections, according to an online poll conducted by the Association for Professionals in Infection Control. A majority of infection control professionals (59%) responded that their health care facilities have stepped up efforts to curb MRSA in the past 6 months. But half said their facilities were "not doing as much as [they] could or should" to stop the transmission of MRSA. "MRSA could be beaten if the leadership at hospitals moved more aggressively to adopt strategies proven to protect patients from these virulent infections," said Lisa McGiffert, director of Consumers Union's Stop Hospital Infections campaign. "We need to require hospitals to report their infection rates so the public can see if they are achieving results." Consumers Union has worked to help pass laws in 20 states requiring hospitals to report their patient infection rates, and it supports a federal infection reporting law. The Centers for Disease Control and Prevention estimates that nearly 95,000 patients developed MRSA infections in 2005—most of which were acquired in health care facilities—and almost 19,000 people died.

WASHINGTON – At least 24 million Americans have diabetes, which costs the nation $174 billion in direct and indirect expenditures in 2007, according to the American Diabetes Association.

The ADA released data that were compiled from a variety of mostly federal sources, including the National Health Interview Survey, the National Health and Nutrition Examination Survey, and the Medical Expenditure Panel Survey. The Lewin Group conducted an analysis of that survey data for the ADA, drawing from the medical, public health, and economics literature.

The report currently does not split costs and incidence according to type of diabetes; those data will be available in a few months, said lead author Tim Dall, at a briefing on the analysis for congressional staff members and reporters.

According to the analysis, the cost of the disease has risen 32% since data were last tabulated in 2002. And the $174 billion figure is likely to be conservative because it doesn't include the approximately 6 million Americans with undiagnosed diabetes, said Ann L. Albright, Ph.D., president of health care and education at the ADA, at the briefing.

The cost estimate also does not include all of the expenses related to diabetes, such as over-the-counter medications or office visits to nonphysician providers other than podiatrists (such as optometrists or dentists).

“The findings reaffirm that diabetes is a public health crisis and its implications are painful and far reaching,” said Dr. Albright, who is also the director of the division of diabetes translation at the Centers for Disease Control and Prevention. “This underscores the importance of early diagnosis and treatment.”

According to the analysis, 17.5 million Americans have been diagnosed with diabetes, up from 12.1 million in 2002. The diabetes population is growing by about 1 million people a year, driven by the aging of the population, more obesity, better detection, decreasing mortality, and growth in minority populations with higher rates of the disease, according to the study, which will be published in Diabetes Care in March (2008;31:1-20).

Most people with diabetes are insured, with their costs covered primarily through government programs. About 8.5 million diabetics are Medicare beneficiaries. Two million are uninsured and a third of those are undiagnosed, estimated the authors.

On the medical expenditure side, the total direct costs were an estimated $116 billion, with $27 billion for direct treatment, $58 billion for chronic complications, and $31 billion in “excess” general medical costs. The largest component of medical spending was for inpatient hospitalization, accounting for $58 billion. The inpatient costs for diabetes-related chronic complications–such as neurologic, peripheral vascular, cardiovascular, and renal–are higher than for diabetes-specific hospitalizations, at $2,281, compared with $1,853.

Diagnosed diabetics have medical costs that are twice as high as they would be without the presence of the disease. Their expenditures average $11,744 a year, of which $6,649 is attributable directly to diabetes.

The indirect costs–pegged at $58 billion–include increased absenteeism, reduced productivity while at work and reduced productivity for those not in the labor force, unemployment from disease-related disability, and lost productive capacity because of early death.

According to the study, there were 284,000 deaths related to diabetes in 2007.

The authors said that while it appears that the disease's burden falls mostly on insurers, employers, and people with diabetes and their families, “the burden is passed along to all of society in the form of higher insurance premiums and taxes, reduced earnings, and reduced standard of living.”

Diabetes affects just under 1 in 10 people, and thus “directly or indirectly touches everyone in society,” they wrote.

WASHINGTON – At least 24 million Americans have diabetes, which costs the nation $174 billion in direct and indirect expenditures in 2007, according to the American Diabetes Association.

The ADA released data that were compiled from a variety of mostly federal sources, including the National Health Interview Survey, the National Health and Nutrition Examination Survey, and the Medical Expenditure Panel Survey. The Lewin Group conducted an analysis of that survey data for the ADA, drawing from the medical, public health, and economics literature.

The report currently does not split costs and incidence according to type of diabetes; those data will be available in a few months, said lead author Tim Dall, at a briefing on the analysis for congressional staff members and reporters.

According to the analysis, the cost of the disease has risen 32% since data were last tabulated in 2002. And the $174 billion figure is likely to be conservative because it doesn't include the approximately 6 million Americans with undiagnosed diabetes, said Ann L. Albright, Ph.D., president of health care and education at the ADA, at the briefing.

The cost estimate also does not include all of the expenses related to diabetes, such as over-the-counter medications or office visits to nonphysician providers other than podiatrists (such as optometrists or dentists).

“The findings reaffirm that diabetes is a public health crisis and its implications are painful and far reaching,” said Dr. Albright, who is also the director of the division of diabetes translation at the Centers for Disease Control and Prevention. “This underscores the importance of early diagnosis and treatment.”

According to the analysis, 17.5 million Americans have been diagnosed with diabetes, up from 12.1 million in 2002. The diabetes population is growing by about 1 million people a year, driven by the aging of the population, more obesity, better detection, decreasing mortality, and growth in minority populations with higher rates of the disease, according to the study, which will be published in Diabetes Care in March (2008;31:1-20).

Most people with diabetes are insured, with their costs covered primarily through government programs. About 8.5 million diabetics are Medicare beneficiaries. Two million are uninsured and a third of those are undiagnosed, estimated the authors.

On the medical expenditure side, the total direct costs were an estimated $116 billion, with $27 billion for direct treatment, $58 billion for chronic complications, and $31 billion in “excess” general medical costs. The largest component of medical spending was for inpatient hospitalization, accounting for $58 billion. The inpatient costs for diabetes-related chronic complications–such as neurologic, peripheral vascular, cardiovascular, and renal–are higher than for diabetes-specific hospitalizations, at $2,281, compared with $1,853.

Diagnosed diabetics have medical costs that are twice as high as they would be without the presence of the disease. Their expenditures average $11,744 a year, of which $6,649 is attributable directly to diabetes.

The indirect costs–pegged at $58 billion–include increased absenteeism, reduced productivity while at work and reduced productivity for those not in the labor force, unemployment from disease-related disability, and lost productive capacity because of early death.

According to the study, there were 284,000 deaths related to diabetes in 2007.

The authors said that while it appears that the disease's burden falls mostly on insurers, employers, and people with diabetes and their families, “the burden is passed along to all of society in the form of higher insurance premiums and taxes, reduced earnings, and reduced standard of living.”

Diabetes affects just under 1 in 10 people, and thus “directly or indirectly touches everyone in society,” they wrote.

WASHINGTON – At least 24 million Americans have diabetes, which costs the nation $174 billion in direct and indirect expenditures in 2007, according to the American Diabetes Association.

The ADA released data that were compiled from a variety of mostly federal sources, including the National Health Interview Survey, the National Health and Nutrition Examination Survey, and the Medical Expenditure Panel Survey. The Lewin Group conducted an analysis of that survey data for the ADA, drawing from the medical, public health, and economics literature.

The report currently does not split costs and incidence according to type of diabetes; those data will be available in a few months, said lead author Tim Dall, at a briefing on the analysis for congressional staff members and reporters.

According to the analysis, the cost of the disease has risen 32% since data were last tabulated in 2002. And the $174 billion figure is likely to be conservative because it doesn't include the approximately 6 million Americans with undiagnosed diabetes, said Ann L. Albright, Ph.D., president of health care and education at the ADA, at the briefing.

The cost estimate also does not include all of the expenses related to diabetes, such as over-the-counter medications or office visits to nonphysician providers other than podiatrists (such as optometrists or dentists).

“The findings reaffirm that diabetes is a public health crisis and its implications are painful and far reaching,” said Dr. Albright, who is also the director of the division of diabetes translation at the Centers for Disease Control and Prevention. “This underscores the importance of early diagnosis and treatment.”

According to the analysis, 17.5 million Americans have been diagnosed with diabetes, up from 12.1 million in 2002. The diabetes population is growing by about 1 million people a year, driven by the aging of the population, more obesity, better detection, decreasing mortality, and growth in minority populations with higher rates of the disease, according to the study, which will be published in Diabetes Care in March (2008;31:1-20).

Most people with diabetes are insured, with their costs covered primarily through government programs. About 8.5 million diabetics are Medicare beneficiaries. Two million are uninsured and a third of those are undiagnosed, estimated the authors.

On the medical expenditure side, the total direct costs were an estimated $116 billion, with $27 billion for direct treatment, $58 billion for chronic complications, and $31 billion in “excess” general medical costs. The largest component of medical spending was for inpatient hospitalization, accounting for $58 billion. The inpatient costs for diabetes-related chronic complications–such as neurologic, peripheral vascular, cardiovascular, and renal–are higher than for diabetes-specific hospitalizations, at $2,281, compared with $1,853.

Diagnosed diabetics have medical costs that are twice as high as they would be without the presence of the disease. Their expenditures average $11,744 a year, of which $6,649 is attributable directly to diabetes.

The indirect costs–pegged at $58 billion–include increased absenteeism, reduced productivity while at work and reduced productivity for those not in the labor force, unemployment from disease-related disability, and lost productive capacity because of early death.

According to the study, there were 284,000 deaths related to diabetes in 2007.

The authors said that while it appears that the disease's burden falls mostly on insurers, employers, and people with diabetes and their families, “the burden is passed along to all of society in the form of higher insurance premiums and taxes, reduced earnings, and reduced standard of living.”

Diabetes affects just under 1 in 10 people, and thus “directly or indirectly touches everyone in society,” they wrote.