Alicia Ault

The Food and Drug Administration said that it is considering, but has not yet determined, whether data from the ENHANCE study of Vytorin warrants any regulatory action.

The agency posted an “early communication” and a MedWatch safety report on its Web site alerting the public and health care practitioners that it is aware of the data but that it has not yet fully examined what appear to be equivocal results.

In a press briefing, Dr. John Jenkins, director of the FDA's Office of New Drugs, said the agency hopes to determine why the ENHANCE (Effect of Combination Ezetimibe and High-Dose Simvastatin vs. Simvastatin Alone on the Atherosclerotic Process in Patients with Heterozygous Familial Hypercholesterolemia) trial results were equivocal, with the combination not affecting plaque size in carotid arteries.

Agency officials who participated in the briefing said they were scratching their heads over the results, given that both ezetimibe and simvastatin have been shown to lower LDL cholesterol levels in ENHANCE and in other studies. LDL is a validated surrogate end point, they said.

FDA reviewers will evaluate the data with an eye on potential safety issues, Dr. Jenkins said. “We don't see any reason to change the label or the approved indications based on this study,” he said.

He said it may take several months for the agency to receive the data from Merck & Co. and Schering-Plough Pharmaceuticals, the companies that conducted the ENHANCE study, and up to 6 months after that to complete the review.

A press release revealing the equivocal results issued by Merck and Schering-Plough set off a firestorm of criticism. The House Energy and Commerce Committee and the Senate Finance Committee are investigating the timing of the data release and myriad other issues around Vytorin. It also prompted a torrent of class action suits alleging marketing fraud by the two drug makers.

The agency said physicians should not stop prescribing Vytorin or Zetia (ezetimibe), but should, in conjunction with patients, “carefully consider the available data and current labeling for Zetia and Vytorin as they make individual treatment decisions.”

Dr. Jenkins pointed out that neither of these products has any data on reduction of heart attack or stroke as of yet. Cardiovascular events will be measured in the companies' ongoing Improved Reduction of Outcomes: Vytorin Efficacy International Trial (IMPROVE-IT), which will be completed in 2011.

“If a physician wants the certainty of using a product that has outcomes data, [there are] a large number of those products available,” he said.

Merck and Schering-Plough “acted with integrity and good faith in connection with the trial,” said Thomas Koestler, Ph.D., president of the Schering-Plough Research Institute. “We stand behind Vytorin and Zetia and stand behind our science,” said Peter S. Kim, Ph.D., Merck Research Laboratories president.

The Food and Drug Administration said that it is considering, but has not yet determined, whether data from the ENHANCE study of Vytorin warrants any regulatory action.

The agency posted an “early communication” and a MedWatch safety report on its Web site alerting the public and health care practitioners that it is aware of the data but that it has not yet fully examined what appear to be equivocal results.

In a press briefing, Dr. John Jenkins, director of the FDA's Office of New Drugs, said the agency hopes to determine why the ENHANCE (Effect of Combination Ezetimibe and High-Dose Simvastatin vs. Simvastatin Alone on the Atherosclerotic Process in Patients with Heterozygous Familial Hypercholesterolemia) trial results were equivocal, with the combination not affecting plaque size in carotid arteries.

Agency officials who participated in the briefing said they were scratching their heads over the results, given that both ezetimibe and simvastatin have been shown to lower LDL cholesterol levels in ENHANCE and in other studies. LDL is a validated surrogate end point, they said.

FDA reviewers will evaluate the data with an eye on potential safety issues, Dr. Jenkins said. “We don't see any reason to change the label or the approved indications based on this study,” he said.

He said it may take several months for the agency to receive the data from Merck & Co. and Schering-Plough Pharmaceuticals, the companies that conducted the ENHANCE study, and up to 6 months after that to complete the review.

A press release revealing the equivocal results issued by Merck and Schering-Plough set off a firestorm of criticism. The House Energy and Commerce Committee and the Senate Finance Committee are investigating the timing of the data release and myriad other issues around Vytorin. It also prompted a torrent of class action suits alleging marketing fraud by the two drug makers.

The agency said physicians should not stop prescribing Vytorin or Zetia (ezetimibe), but should, in conjunction with patients, “carefully consider the available data and current labeling for Zetia and Vytorin as they make individual treatment decisions.”

Dr. Jenkins pointed out that neither of these products has any data on reduction of heart attack or stroke as of yet. Cardiovascular events will be measured in the companies' ongoing Improved Reduction of Outcomes: Vytorin Efficacy International Trial (IMPROVE-IT), which will be completed in 2011.

“If a physician wants the certainty of using a product that has outcomes data, [there are] a large number of those products available,” he said.

Merck and Schering-Plough “acted with integrity and good faith in connection with the trial,” said Thomas Koestler, Ph.D., president of the Schering-Plough Research Institute. “We stand behind Vytorin and Zetia and stand behind our science,” said Peter S. Kim, Ph.D., Merck Research Laboratories president.

The Food and Drug Administration said that it is considering, but has not yet determined, whether data from the ENHANCE study of Vytorin warrants any regulatory action.

The agency posted an “early communication” and a MedWatch safety report on its Web site alerting the public and health care practitioners that it is aware of the data but that it has not yet fully examined what appear to be equivocal results.

In a press briefing, Dr. John Jenkins, director of the FDA's Office of New Drugs, said the agency hopes to determine why the ENHANCE (Effect of Combination Ezetimibe and High-Dose Simvastatin vs. Simvastatin Alone on the Atherosclerotic Process in Patients with Heterozygous Familial Hypercholesterolemia) trial results were equivocal, with the combination not affecting plaque size in carotid arteries.

Agency officials who participated in the briefing said they were scratching their heads over the results, given that both ezetimibe and simvastatin have been shown to lower LDL cholesterol levels in ENHANCE and in other studies. LDL is a validated surrogate end point, they said.

FDA reviewers will evaluate the data with an eye on potential safety issues, Dr. Jenkins said. “We don't see any reason to change the label or the approved indications based on this study,” he said.

He said it may take several months for the agency to receive the data from Merck & Co. and Schering-Plough Pharmaceuticals, the companies that conducted the ENHANCE study, and up to 6 months after that to complete the review.

A press release revealing the equivocal results issued by Merck and Schering-Plough set off a firestorm of criticism. The House Energy and Commerce Committee and the Senate Finance Committee are investigating the timing of the data release and myriad other issues around Vytorin. It also prompted a torrent of class action suits alleging marketing fraud by the two drug makers.

The agency said physicians should not stop prescribing Vytorin or Zetia (ezetimibe), but should, in conjunction with patients, “carefully consider the available data and current labeling for Zetia and Vytorin as they make individual treatment decisions.”

Dr. Jenkins pointed out that neither of these products has any data on reduction of heart attack or stroke as of yet. Cardiovascular events will be measured in the companies' ongoing Improved Reduction of Outcomes: Vytorin Efficacy International Trial (IMPROVE-IT), which will be completed in 2011.

“If a physician wants the certainty of using a product that has outcomes data, [there are] a large number of those products available,” he said.

Merck and Schering-Plough “acted with integrity and good faith in connection with the trial,” said Thomas Koestler, Ph.D., president of the Schering-Plough Research Institute. “We stand behind Vytorin and Zetia and stand behind our science,” said Peter S. Kim, Ph.D., Merck Research Laboratories president.

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 hospitals. 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. But seven hospitals did not have an RN on duty, and one hospital did not have a physician on call or on duty on at least 1 of the 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, such as how to use emergency response equipment or how to follow lifesaving protocols, said the IG.

The CMS issued a written response to the IG that was included in the 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 specific 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.

And while transfers may be acceptable, “No hospital should use 911 as a substitute for providing proper care to patients,” said Ms. Sandvig. That practice, however, is very limited, she said, alleging that the IG had misrepresented facilities' policies and practices.

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 hospitals. 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. But seven hospitals did not have an RN on duty, and one hospital did not have a physician on call or on duty on at least 1 of the 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, such as how to use emergency response equipment or how to follow lifesaving protocols, said the IG.

The CMS issued a written response to the IG that was included in the 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 specific 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.

And while transfers may be acceptable, “No hospital should use 911 as a substitute for providing proper care to patients,” said Ms. Sandvig. That practice, however, is very limited, she said, alleging that the IG had misrepresented facilities' policies and practices.

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 hospitals. 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. But seven hospitals did not have an RN on duty, and one hospital did not have a physician on call or on duty on at least 1 of the 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, such as how to use emergency response equipment or how to follow lifesaving protocols, said the IG.

The CMS issued a written response to the IG that was included in the 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 specific 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.

And while transfers may be acceptable, “No hospital should use 911 as a substitute for providing proper care to patients,” said Ms. Sandvig. That practice, however, is very limited, she said, alleging that the IG had misrepresented facilities' policies and practices.

WASHINGTON – The Medicare Payment Advisory Commission has voted to recommend that Congress increase Medicare physician fees by 1.1% in 2009.

The recommendation will be included in MedPAC's final report to Congress next month but was discussed and voted on at a panel meeting in January.

The panel believes that physician fees should not be cut, said MedPAC chairman Glenn M. Hackbarth. “That's a very important message for us to convey to Congress.”

Before the vote, Mr. Hackbarth said the commission struggled each year to come up with the right numbers. “We try to zero in on the most appropriate update,” he said, adding that cost reports, physicians' access to capital, and beneficiaries' access to physician services all go into that calculation.

MedPAC staff member John Richardson told commissioners that it appears that most physicians continue to accept new Medicare patients, but there has been an increase in beneficiaries who said they had trouble finding a new primary care physician, according to a MedPAC survey. In 2006, 24% said they had trouble; by 2007, 30% of beneficiaries reported difficulty.

Medicare fees also are staying fairly steady as a percentage of private insurance fees, said Mr. Richardson. In 2005, Medicare paid 83% of what private insurers did, and in 2006, that had slipped slightly to 81%.

In December, Congress passed and the President signed a last-minute fix to the 2008 fee schedule, granting a 6-month, 0.5% increase for 2008. The fee increase, which included incentives for rural physicians, will cost about $3.1 billion, Mr. Richardson said.

Under current law, Medicare will cut physician fees by 5.5% in 2009. But when fees are renegotiated in July, the 2009 update could change.

MedPAC recommended that fees be increased in 2009 by the projected change in input prices (2.6%) minus the expected growth in productivity (1.5%), for a 1.1% increase. The cost: about $2 billion. The commission projected that spending would increase by another $8 billion out to 2011.

The commission also urged Congress to set up a system to measure and report physician resource use. The reporting should be confidential for 2 years. After that, the Centers for Medicare and Medicaid Services should establish a new payment system that takes into account both resource use and quality measures.

Dr. Ronald D. Castellanos, a physician in a group practice in Port Charlotte, Fla., and a MedPAC commissioner, said a recommendation for an increase was better than a cut, but that the 1.1% “doesn't keep up with our costs.” Dr. Castellanos said that physicians would not look happily on the recommended update.

“Quite honestly, it's insulting,” he said. “The update is a blunt tool for trying to constrain costs,” said Dr. Castellanos, who voted against the update.

Mr. Hackbarth said the panel's recommendation should not be taken to mean that the commission believed that everything was fine with the reimbursement system. But, he added, the problems with Medicare threatened beneficiaries, taxpayers, and even his children's future. Solutions should not be focused only on physicians, said Mr. Hackbarth, adding, “It's way bigger than that.”

WASHINGTON – The Medicare Payment Advisory Commission has voted to recommend that Congress increase Medicare physician fees by 1.1% in 2009.

The recommendation will be included in MedPAC's final report to Congress next month but was discussed and voted on at a panel meeting in January.

The panel believes that physician fees should not be cut, said MedPAC chairman Glenn M. Hackbarth. “That's a very important message for us to convey to Congress.”

Before the vote, Mr. Hackbarth said the commission struggled each year to come up with the right numbers. “We try to zero in on the most appropriate update,” he said, adding that cost reports, physicians' access to capital, and beneficiaries' access to physician services all go into that calculation.

MedPAC staff member John Richardson told commissioners that it appears that most physicians continue to accept new Medicare patients, but there has been an increase in beneficiaries who said they had trouble finding a new primary care physician, according to a MedPAC survey. In 2006, 24% said they had trouble; by 2007, 30% of beneficiaries reported difficulty.

Medicare fees also are staying fairly steady as a percentage of private insurance fees, said Mr. Richardson. In 2005, Medicare paid 83% of what private insurers did, and in 2006, that had slipped slightly to 81%.

In December, Congress passed and the President signed a last-minute fix to the 2008 fee schedule, granting a 6-month, 0.5% increase for 2008. The fee increase, which included incentives for rural physicians, will cost about $3.1 billion, Mr. Richardson said.

Under current law, Medicare will cut physician fees by 5.5% in 2009. But when fees are renegotiated in July, the 2009 update could change.

MedPAC recommended that fees be increased in 2009 by the projected change in input prices (2.6%) minus the expected growth in productivity (1.5%), for a 1.1% increase. The cost: about $2 billion. The commission projected that spending would increase by another $8 billion out to 2011.

The commission also urged Congress to set up a system to measure and report physician resource use. The reporting should be confidential for 2 years. After that, the Centers for Medicare and Medicaid Services should establish a new payment system that takes into account both resource use and quality measures.

Dr. Ronald D. Castellanos, a physician in a group practice in Port Charlotte, Fla., and a MedPAC commissioner, said a recommendation for an increase was better than a cut, but that the 1.1% “doesn't keep up with our costs.” Dr. Castellanos said that physicians would not look happily on the recommended update.

“Quite honestly, it's insulting,” he said. “The update is a blunt tool for trying to constrain costs,” said Dr. Castellanos, who voted against the update.

Mr. Hackbarth said the panel's recommendation should not be taken to mean that the commission believed that everything was fine with the reimbursement system. But, he added, the problems with Medicare threatened beneficiaries, taxpayers, and even his children's future. Solutions should not be focused only on physicians, said Mr. Hackbarth, adding, “It's way bigger than that.”

WASHINGTON – The Medicare Payment Advisory Commission has voted to recommend that Congress increase Medicare physician fees by 1.1% in 2009.

The recommendation will be included in MedPAC's final report to Congress next month but was discussed and voted on at a panel meeting in January.

The panel believes that physician fees should not be cut, said MedPAC chairman Glenn M. Hackbarth. “That's a very important message for us to convey to Congress.”

Before the vote, Mr. Hackbarth said the commission struggled each year to come up with the right numbers. “We try to zero in on the most appropriate update,” he said, adding that cost reports, physicians' access to capital, and beneficiaries' access to physician services all go into that calculation.

MedPAC staff member John Richardson told commissioners that it appears that most physicians continue to accept new Medicare patients, but there has been an increase in beneficiaries who said they had trouble finding a new primary care physician, according to a MedPAC survey. In 2006, 24% said they had trouble; by 2007, 30% of beneficiaries reported difficulty.

Medicare fees also are staying fairly steady as a percentage of private insurance fees, said Mr. Richardson. In 2005, Medicare paid 83% of what private insurers did, and in 2006, that had slipped slightly to 81%.

In December, Congress passed and the President signed a last-minute fix to the 2008 fee schedule, granting a 6-month, 0.5% increase for 2008. The fee increase, which included incentives for rural physicians, will cost about $3.1 billion, Mr. Richardson said.

Under current law, Medicare will cut physician fees by 5.5% in 2009. But when fees are renegotiated in July, the 2009 update could change.

MedPAC recommended that fees be increased in 2009 by the projected change in input prices (2.6%) minus the expected growth in productivity (1.5%), for a 1.1% increase. The cost: about $2 billion. The commission projected that spending would increase by another $8 billion out to 2011.

The commission also urged Congress to set up a system to measure and report physician resource use. The reporting should be confidential for 2 years. After that, the Centers for Medicare and Medicaid Services should establish a new payment system that takes into account both resource use and quality measures.

Dr. Ronald D. Castellanos, a physician in a group practice in Port Charlotte, Fla., and a MedPAC commissioner, said a recommendation for an increase was better than a cut, but that the 1.1% “doesn't keep up with our costs.” Dr. Castellanos said that physicians would not look happily on the recommended update.

“Quite honestly, it's insulting,” he said. “The update is a blunt tool for trying to constrain costs,” said Dr. Castellanos, who voted against the update.

Mr. Hackbarth said the panel's recommendation should not be taken to mean that the commission believed that everything was fine with the reimbursement system. But, he added, the problems with Medicare threatened beneficiaries, taxpayers, and even his children's future. Solutions should not be focused only on physicians, said Mr. Hackbarth, adding, “It's way bigger than that.”

Physician-owned specialty hospitals are largely unprepared to handle emergencies and should be more closely tracked 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 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 hospitals. 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 the U.S.

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. But seven hospitals did not have an RN on duty, and one hospital did not have a physician on call or on duty on at least 1 of the 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,” stated the report.

The IG urged the CMS to enforce Medicare staffing requirements. Hospitals should also have written policies on how to use emergency response equipment or follow lifesaving protocols, said the IG.

The CMS issued a written response to the IG. The agency said it agreed with the IG's recommendations and 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, because those facilities were accredited by the Joint Commission or the American Osteopathic Association.

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

Both the American Hospital Association and the Federation of American Hospitals pounced on the report, saying that it shows that physician-owned facilities are a threat to patient safety. Chip Kahn, president of the FAH, also called for a ban. The report, and “ongoing cherry-picking of healthier patients with good health coverage and increased utilization and associated health care costs, underscore yet another reason for Congress to pick up where it left off last year,” he said in a statement.

ELSEVIER GLOBAL MEDICAL NEWS

Physician-owned specialty hospitals are largely unprepared to handle emergencies and should be more closely tracked 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 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 hospitals. 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 the U.S.

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. But seven hospitals did not have an RN on duty, and one hospital did not have a physician on call or on duty on at least 1 of the 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,” stated the report.

The IG urged the CMS to enforce Medicare staffing requirements. Hospitals should also have written policies on how to use emergency response equipment or follow lifesaving protocols, said the IG.

The CMS issued a written response to the IG. The agency said it agreed with the IG's recommendations and 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, because those facilities were accredited by the Joint Commission or the American Osteopathic Association.

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

Both the American Hospital Association and the Federation of American Hospitals pounced on the report, saying that it shows that physician-owned facilities are a threat to patient safety. Chip Kahn, president of the FAH, also called for a ban. The report, and “ongoing cherry-picking of healthier patients with good health coverage and increased utilization and associated health care costs, underscore yet another reason for Congress to pick up where it left off last year,” he said in a statement.

ELSEVIER GLOBAL MEDICAL NEWS

Physician-owned specialty hospitals are largely unprepared to handle emergencies and should be more closely tracked 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 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 hospitals. 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 the U.S.

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. But seven hospitals did not have an RN on duty, and one hospital did not have a physician on call or on duty on at least 1 of the 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,” stated the report.

The IG urged the CMS to enforce Medicare staffing requirements. Hospitals should also have written policies on how to use emergency response equipment or follow lifesaving protocols, said the IG.

The CMS issued a written response to the IG. The agency said it agreed with the IG's recommendations and 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, because those facilities were accredited by the Joint Commission or the American Osteopathic Association.

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

Both the American Hospital Association and the Federation of American Hospitals pounced on the report, saying that it shows that physician-owned facilities are a threat to patient safety. Chip Kahn, president of the FAH, also called for a ban. The report, and “ongoing cherry-picking of healthier patients with good health coverage and increased utilization and associated health care costs, underscore yet another reason for Congress to pick up where it left off last year,” he said in a statement.

ELSEVIER GLOBAL MEDICAL NEWS

Hospitals participating in a Medicare-sponsored, pay-for-performance demonstration project have sustained initial gains in quality improvement and have seen a huge decline in mortality and costs 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 dropped by 2%. 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.

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, a policy CMS regards as the most effective way 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 myo-cardial 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 told reporters.

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 project has changed the mind-set of the health care system staff 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.

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 have sustained initial gains in quality improvement and have seen a huge decline in mortality and costs 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 dropped by 2%. 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.

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, a policy CMS regards as the most effective way 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 myo-cardial 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 told reporters.

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 project has changed the mind-set of the health care system staff 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.

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 have sustained initial gains in quality improvement and have seen a huge decline in mortality and costs 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 dropped by 2%. 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.

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, a policy CMS regards as the most effective way 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 myo-cardial 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 told reporters.

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 project has changed the mind-set of the health care system staff 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.

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.

Physician-owned specialty hospitals are largely unprepared to handle emergencies, 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. Overall, 66 of these were surgical, 23 were orthopedic, and 20 were cardiac hospitals. 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 elsewhere.

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

In all, 93% of the hospitals met Medicare staffing requirements: having a registered nurse on duty at all times and a physician on call at all times. But seven hospitals did not have an RN on duty, and one hospital did not have a physician on call or on duty on at least 1 of the 8 days.

Two-thirds of the hospitals told staff to call 911 in case of emergency. Although transferring a patient 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.

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

Almost 25% of hospitals did not address in written policies the “appraisal of emergencies, initial treatment of emergencies, or referral and transfer of patients.”

The CMS issued a response saying it would look at current compliance through its routine hospital surveys. But as many as 42% of the 109 would not have been subject to CMS oversight, as they were accredited by the Joint Commission or the American Osteopathic Association. The CMS also said it would use its authority to require hospitals to have written policies and procedures on managing emergencies, but that would also consider whether regulatory changes are needed to establish specific requirements for equipment and staff qualifications.

Physician-owned specialty hospitals are largely unprepared to handle emergencies, 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. Overall, 66 of these were surgical, 23 were orthopedic, and 20 were cardiac hospitals. 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 elsewhere.

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

In all, 93% of the hospitals met Medicare staffing requirements: having a registered nurse on duty at all times and a physician on call at all times. But seven hospitals did not have an RN on duty, and one hospital did not have a physician on call or on duty on at least 1 of the 8 days.

Two-thirds of the hospitals told staff to call 911 in case of emergency. Although transferring a patient 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.

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

Almost 25% of hospitals did not address in written policies the “appraisal of emergencies, initial treatment of emergencies, or referral and transfer of patients.”

The CMS issued a response saying it would look at current compliance through its routine hospital surveys. But as many as 42% of the 109 would not have been subject to CMS oversight, as they were accredited by the Joint Commission or the American Osteopathic Association. The CMS also said it would use its authority to require hospitals to have written policies and procedures on managing emergencies, but that would also consider whether regulatory changes are needed to establish specific requirements for equipment and staff qualifications.

Physician-owned specialty hospitals are largely unprepared to handle emergencies, 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. Overall, 66 of these were surgical, 23 were orthopedic, and 20 were cardiac hospitals. 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 elsewhere.

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

In all, 93% of the hospitals met Medicare staffing requirements: having a registered nurse on duty at all times and a physician on call at all times. But seven hospitals did not have an RN on duty, and one hospital did not have a physician on call or on duty on at least 1 of the 8 days.

Two-thirds of the hospitals told staff to call 911 in case of emergency. Although transferring a patient 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.

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

Almost 25% of hospitals did not address in written policies the “appraisal of emergencies, initial treatment of emergencies, or referral and transfer of patients.”

The CMS issued a response saying it would look at current compliance through its routine hospital surveys. But as many as 42% of the 109 would not have been subject to CMS oversight, as they were accredited by the Joint Commission or the American Osteopathic Association. The CMS also said it would use its authority to require hospitals to have written policies and procedures on managing emergencies, but that would also consider whether regulatory changes are needed to establish specific requirements for equipment and staff qualifications.

Vytorin Probe Expanded

The House Energy and Commerce Committee has expanded its investigation of the circumstances surrounding the release of data from the ENHANCE trial (see article on p. 1). In December, the Committee wrote to Merck & Co. and Schering-Plough seeking more information on ENHANCE, alleging potential data fraud. Raising the specter of Vioxx, Rep. John Dingell (D-Mich.) and Rep. Bart Stupak (D-Mich.) said they want to find out what Merck and Schering-Plough knew about Vytorin's apparent lack of efficacy and when they knew it. The release of equivocal ENHANCE results last month prompted the committee to question the propriety of the Vytorin direct-to-consumer ad campaign. The companies subsequently pulled the television commercials, and modified the print ads. “We are interested in whether the Food and Drug Administration's Division of Drug Marketing, Advertising, and Communications has been involved with these Vytorin advertisements,” the congressmen wrote to Dr. Andrew von Eschenbach, FDA commissioner, in a Jan. 16 letter. “Physicians and their patients should have been made aware as soon as possible that Vytorin provided no benefit over a widely-used, cheaper, generic alternative,” they said. Shortly thereafter, the panel wrote the companies seeking information on secondary end points. The committee also wrote to the Centers for Medicare and Medicaid Services to find out how much the two federal health programs have spent on Vytorin since April and to ask whether the CMS has considered withdrawing payment for the drug.

Jarvik's Endorsement Questioned

The House Energy and Commerce Committee also is investigating celebrity endorsements of prescription drugs in direct-to-consumer advertisements, with a focus on Dr. Robert Jarvik's TV ads for Pfizer's Lipitor (atorvastatin). The committee wrote to Pfizer CEO Jeffrey B. Kindler last month, seeking all correspondence, records, and contractual arrangements with Dr. Jarvik. In addition, the committee asked for “any records relating to the veracity of any claims” made by Dr. Jarvik, along with documentation of whether he uses the drug and medical records that would indicate his diagnosis or purpose for using Lipitor. The letter stated that the ad might be misleading, since it appears that Dr. Jarvik is endorsing the drug and that he “may not be a practicing physician with a valid license in any state.” The committee wrote separately to the FDA, seeking records of agency reviews of the ad or complaints relating to the campaign. Pfizer was given until the end of January to respond. A Pfizer spokeswoman said, “We intend to fully cooperate with the congressional committee's request.”

FDA and Tobacco Redux

A coalition of medical professional societies and health advocates once again is pushing for approval of legislation to grant the FDA the authority to regulate tobacco. Last year, the Family Smoking Prevention and Tobacco Control Act (H.R. 1108/S. 6.35) garnered 216 House cosponsors but stalled in committee; the Senate companion had 54 cosponsors. American Heart Association lobbyists told reporters last month that the bill soon would be marked up by the House Energy and Commerce Committee. Dr. Clyde Yancy, speaking for the AHA, noted that tobacco manufacturers continue to target children, spending $36 million a day on marketing, most of it directed at kids. Each day, 4,000 children start smoking; of those, 1,000 will become lifelong smokers, said Dr. Yancy, medical director at the Baylor Heart and Vascular Institute in Dallas. The American Medical Association also called for FDA regulation of tobacco, in response to an American Lung Association report faulting federal control policies.

Feds' Failing Tobacco Grade

A recently issued American Lung Association report gives the federal government Ds and Fs for failing to provide the FDA the authority to regulate tobacco, and for not raising taxes or putting policies into place to encourage cessation. “The State of Tobacco Control: 2007” reported that states are in many ways doing a better job than the feds: 21 states have workplace smoking bans, and 25 states have a cigarette tax of $1 or more per pack. Twelve states received an F on taxes, however. Only nine states got an A for funding cessation and prevention programs at 90% or more of the levels recommended by the Centers for Disease Control and Prevention.

Vytorin Probe Expanded

The House Energy and Commerce Committee has expanded its investigation of the circumstances surrounding the release of data from the ENHANCE trial (see article on p. 1). In December, the Committee wrote to Merck & Co. and Schering-Plough seeking more information on ENHANCE, alleging potential data fraud. Raising the specter of Vioxx, Rep. John Dingell (D-Mich.) and Rep. Bart Stupak (D-Mich.) said they want to find out what Merck and Schering-Plough knew about Vytorin's apparent lack of efficacy and when they knew it. The release of equivocal ENHANCE results last month prompted the committee to question the propriety of the Vytorin direct-to-consumer ad campaign. The companies subsequently pulled the television commercials, and modified the print ads. “We are interested in whether the Food and Drug Administration's Division of Drug Marketing, Advertising, and Communications has been involved with these Vytorin advertisements,” the congressmen wrote to Dr. Andrew von Eschenbach, FDA commissioner, in a Jan. 16 letter. “Physicians and their patients should have been made aware as soon as possible that Vytorin provided no benefit over a widely-used, cheaper, generic alternative,” they said. Shortly thereafter, the panel wrote the companies seeking information on secondary end points. The committee also wrote to the Centers for Medicare and Medicaid Services to find out how much the two federal health programs have spent on Vytorin since April and to ask whether the CMS has considered withdrawing payment for the drug.

Jarvik's Endorsement Questioned

The House Energy and Commerce Committee also is investigating celebrity endorsements of prescription drugs in direct-to-consumer advertisements, with a focus on Dr. Robert Jarvik's TV ads for Pfizer's Lipitor (atorvastatin). The committee wrote to Pfizer CEO Jeffrey B. Kindler last month, seeking all correspondence, records, and contractual arrangements with Dr. Jarvik. In addition, the committee asked for “any records relating to the veracity of any claims” made by Dr. Jarvik, along with documentation of whether he uses the drug and medical records that would indicate his diagnosis or purpose for using Lipitor. The letter stated that the ad might be misleading, since it appears that Dr. Jarvik is endorsing the drug and that he “may not be a practicing physician with a valid license in any state.” The committee wrote separately to the FDA, seeking records of agency reviews of the ad or complaints relating to the campaign. Pfizer was given until the end of January to respond. A Pfizer spokeswoman said, “We intend to fully cooperate with the congressional committee's request.”

FDA and Tobacco Redux

A coalition of medical professional societies and health advocates once again is pushing for approval of legislation to grant the FDA the authority to regulate tobacco. Last year, the Family Smoking Prevention and Tobacco Control Act (H.R. 1108/S. 6.35) garnered 216 House cosponsors but stalled in committee; the Senate companion had 54 cosponsors. American Heart Association lobbyists told reporters last month that the bill soon would be marked up by the House Energy and Commerce Committee. Dr. Clyde Yancy, speaking for the AHA, noted that tobacco manufacturers continue to target children, spending $36 million a day on marketing, most of it directed at kids. Each day, 4,000 children start smoking; of those, 1,000 will become lifelong smokers, said Dr. Yancy, medical director at the Baylor Heart and Vascular Institute in Dallas. The American Medical Association also called for FDA regulation of tobacco, in response to an American Lung Association report faulting federal control policies.

Feds' Failing Tobacco Grade

A recently issued American Lung Association report gives the federal government Ds and Fs for failing to provide the FDA the authority to regulate tobacco, and for not raising taxes or putting policies into place to encourage cessation. “The State of Tobacco Control: 2007” reported that states are in many ways doing a better job than the feds: 21 states have workplace smoking bans, and 25 states have a cigarette tax of $1 or more per pack. Twelve states received an F on taxes, however. Only nine states got an A for funding cessation and prevention programs at 90% or more of the levels recommended by the Centers for Disease Control and Prevention.

Vytorin Probe Expanded

The House Energy and Commerce Committee has expanded its investigation of the circumstances surrounding the release of data from the ENHANCE trial (see article on p. 1). In December, the Committee wrote to Merck & Co. and Schering-Plough seeking more information on ENHANCE, alleging potential data fraud. Raising the specter of Vioxx, Rep. John Dingell (D-Mich.) and Rep. Bart Stupak (D-Mich.) said they want to find out what Merck and Schering-Plough knew about Vytorin's apparent lack of efficacy and when they knew it. The release of equivocal ENHANCE results last month prompted the committee to question the propriety of the Vytorin direct-to-consumer ad campaign. The companies subsequently pulled the television commercials, and modified the print ads. “We are interested in whether the Food and Drug Administration's Division of Drug Marketing, Advertising, and Communications has been involved with these Vytorin advertisements,” the congressmen wrote to Dr. Andrew von Eschenbach, FDA commissioner, in a Jan. 16 letter. “Physicians and their patients should have been made aware as soon as possible that Vytorin provided no benefit over a widely-used, cheaper, generic alternative,” they said. Shortly thereafter, the panel wrote the companies seeking information on secondary end points. The committee also wrote to the Centers for Medicare and Medicaid Services to find out how much the two federal health programs have spent on Vytorin since April and to ask whether the CMS has considered withdrawing payment for the drug.

Jarvik's Endorsement Questioned

The House Energy and Commerce Committee also is investigating celebrity endorsements of prescription drugs in direct-to-consumer advertisements, with a focus on Dr. Robert Jarvik's TV ads for Pfizer's Lipitor (atorvastatin). The committee wrote to Pfizer CEO Jeffrey B. Kindler last month, seeking all correspondence, records, and contractual arrangements with Dr. Jarvik. In addition, the committee asked for “any records relating to the veracity of any claims” made by Dr. Jarvik, along with documentation of whether he uses the drug and medical records that would indicate his diagnosis or purpose for using Lipitor. The letter stated that the ad might be misleading, since it appears that Dr. Jarvik is endorsing the drug and that he “may not be a practicing physician with a valid license in any state.” The committee wrote separately to the FDA, seeking records of agency reviews of the ad or complaints relating to the campaign. Pfizer was given until the end of January to respond. A Pfizer spokeswoman said, “We intend to fully cooperate with the congressional committee's request.”

FDA and Tobacco Redux

A coalition of medical professional societies and health advocates once again is pushing for approval of legislation to grant the FDA the authority to regulate tobacco. Last year, the Family Smoking Prevention and Tobacco Control Act (H.R. 1108/S. 6.35) garnered 216 House cosponsors but stalled in committee; the Senate companion had 54 cosponsors. American Heart Association lobbyists told reporters last month that the bill soon would be marked up by the House Energy and Commerce Committee. Dr. Clyde Yancy, speaking for the AHA, noted that tobacco manufacturers continue to target children, spending $36 million a day on marketing, most of it directed at kids. Each day, 4,000 children start smoking; of those, 1,000 will become lifelong smokers, said Dr. Yancy, medical director at the Baylor Heart and Vascular Institute in Dallas. The American Medical Association also called for FDA regulation of tobacco, in response to an American Lung Association report faulting federal control policies.

Feds' Failing Tobacco Grade

A recently issued American Lung Association report gives the federal government Ds and Fs for failing to provide the FDA the authority to regulate tobacco, and for not raising taxes or putting policies into place to encourage cessation. “The State of Tobacco Control: 2007” reported that states are in many ways doing a better job than the feds: 21 states have workplace smoking bans, and 25 states have a cigarette tax of $1 or more per pack. Twelve states received an F on taxes, however. Only nine states got an A for funding cessation and prevention programs at 90% or more of the levels recommended by the Centers for Disease Control and Prevention.

WASHINGTON — The nation spent $2 trillion, or $7,000 per person, on health care in 2006. While that was only a small increase from the previous year, America's prescription drug tab increased by 8.5%, fueled largely by the new Medicare Part D drug benefit.

Health spending as a share of the nation's gross domestic product continues to rise, hitting 16% in 2006.

Total spending on physician and clinical services grew 5.9% to $448 billion, the slowest rate of growth since 1999. Physician pay crawled almost to a halt, largely because of the freeze in Medicare's reimbursement rates in 2006. Private insurers seemed to have followed suit, said Cathy Cowan, an economist at the Centers for Medicare and Medicaid Services. Cowan, a coauthor of an annual analysis of the nation's health spending, spoke at a briefing on the report, which was published in the January/February issue of Health Affairs.

Spending on nursing home and home health declined from the previous year's growth. Spending still grew 3.5% in 2006, but that was less than the almost 5% increase in 2005.

Medicare had the fastest rate of growth since 1981, according to the report. Spending increased 19% in 2006 to $401 billion, driven largely by the prescription drug benefit and the cost of administration for that benefit and for Medicare Advantage, a managed care program.

Medicaid spending dropped for the first time since the program began in 1965. The 0.9% decrease was largely due to a large number of Medicaid enrollees who were shifted into Medicare for their prescription drugs.

Overall drug spending grew 8.5% in 2006—a far cry from the double-digit increases seen in the late 1990s, but still an increase from the 5.8% rise in spending in 2005. Half of the 2006 increase was due to greater utilization, not surprising given that about 23 million Medicare beneficiaries took advantage of the new benefit. Prescription prices increased by only a little over 3%, according to an annual analysis by actuaries at the Centers for Medicare and Medicaid Services.

The change in the drug rebate picture also contributed to rising drug costs. Under Medicaid, states received an average 30% rebate from drugmakers. Medicare, however, got only about 5% from manufacturers for the millions of beneficiaries who shifted out of Medicaid.

Medicare spent $41 billion on Part D in 2006, with $35 billion for drug purchases and $6 billion for administration and “net cost of insurance”—that is, the cost of subsidizing premiums for low-income beneficiaries and costs for transferring beneficiaries into private plans. Medicare paid for 18% of all retail drugs, compared with only 2% in 2005. Medicare took on costs that were previously covered by private insurers, Medicaid, and the uninsured. On average, each Part D enrollee received $1,700 in benefits, according to CMS.

The largest increase in drug utilization came from beneficiaries using the Part D benefit. But there was also increased drug use due to new indications for existing drugs, growth in several therapeutic classes, and rising use of specialty drugs such as injectable biologics.

The rising availability of generic drugs—and programs designed to encourage use of generics, such as smaller copays for that category—also drove an increase in pharmaceutical utilization. A $4 generic program offered by Wal-Mart contributed to that trend and also helped keep prices down, according to the CMS authors. Sixty-three percent of drugs dispensed in the United States in 2006 were generic, according to the report.

Overall, the CMS analysis shows that the largest category of health spending is still hospital care, which consumes 31% of the nation's health dollars. Other spending, which includes dental, home health, durable medical equipment, over-the-counter medications, public health, research, and capital equipment, consumes 25% of the health dollar. Physician and clinical services follow at 21%, then prescription drugs at 10%, administration at 7%, and nursing home care at 6%.

The authors said the data they had at hand and their analysis did not allow them to determine whether the prescription drug benefit had increased or lowered overall health care spending.

Richard Foster, the chief actuary at CMS, told reporters that the study showed that the “overall cost of prescription drugs has changed very little as a result of Part D.” A study by Consumers Union, however, seemed to refute that claim. (See box.)

Consumers Union: Drug Prices Up

Government economists have concluded that the Medicare Part D prescription drug benefit did not affect the price of pharmaceuticals in 2006, the program's first full year, but Consumers Union has issued a study charging that drug prices are indeed rising under the program.

Each month since December 2005, the consumer advocacy group has tracked the prices of five common drugs used by Medicare beneficiaries in one ZIP code in each of five states—California, New York, Illinois, Florida, and Texas. The data are taken directly from

Medicare.gov

Medicare beneficiaries might be bearing the brunt of price increases, because they usually are liable for a percentage of the drug's price as a copayment. “We're seeing a lot of inflation,” said Consumers Union Senior Policy Analyst Bill Vaughan in an interview.

The group also found that prices generally rise the most from December to January—after a beneficiary has locked into a plan for the upcoming year. The average increase for the five drugs as a package (Lipitor, Celebrex, Zoloft, nifedipine ER, and Altace) was $369 from December 2007 to January 2008, according to Consumers Union. “Most of these Medicare drug plans are increasing costs [at] double or triple the rate of inflation, which really torpedoes the insurance industry's claim that they are getting the best deal for seniors,” said Mr. Vaughan.

WASHINGTON — The nation spent $2 trillion, or $7,000 per person, on health care in 2006. While that was only a small increase from the previous year, America's prescription drug tab increased by 8.5%, fueled largely by the new Medicare Part D drug benefit.

Health spending as a share of the nation's gross domestic product continues to rise, hitting 16% in 2006.

Total spending on physician and clinical services grew 5.9% to $448 billion, the slowest rate of growth since 1999. Physician pay crawled almost to a halt, largely because of the freeze in Medicare's reimbursement rates in 2006. Private insurers seemed to have followed suit, said Cathy Cowan, an economist at the Centers for Medicare and Medicaid Services. Cowan, a coauthor of an annual analysis of the nation's health spending, spoke at a briefing on the report, which was published in the January/February issue of Health Affairs.

Spending on nursing home and home health declined from the previous year's growth. Spending still grew 3.5% in 2006, but that was less than the almost 5% increase in 2005.

Medicare had the fastest rate of growth since 1981, according to the report. Spending increased 19% in 2006 to $401 billion, driven largely by the prescription drug benefit and the cost of administration for that benefit and for Medicare Advantage, a managed care program.

Medicaid spending dropped for the first time since the program began in 1965. The 0.9% decrease was largely due to a large number of Medicaid enrollees who were shifted into Medicare for their prescription drugs.

Overall drug spending grew 8.5% in 2006—a far cry from the double-digit increases seen in the late 1990s, but still an increase from the 5.8% rise in spending in 2005. Half of the 2006 increase was due to greater utilization, not surprising given that about 23 million Medicare beneficiaries took advantage of the new benefit. Prescription prices increased by only a little over 3%, according to an annual analysis by actuaries at the Centers for Medicare and Medicaid Services.

The change in the drug rebate picture also contributed to rising drug costs. Under Medicaid, states received an average 30% rebate from drugmakers. Medicare, however, got only about 5% from manufacturers for the millions of beneficiaries who shifted out of Medicaid.

Medicare spent $41 billion on Part D in 2006, with $35 billion for drug purchases and $6 billion for administration and “net cost of insurance”—that is, the cost of subsidizing premiums for low-income beneficiaries and costs for transferring beneficiaries into private plans. Medicare paid for 18% of all retail drugs, compared with only 2% in 2005. Medicare took on costs that were previously covered by private insurers, Medicaid, and the uninsured. On average, each Part D enrollee received $1,700 in benefits, according to CMS.

The largest increase in drug utilization came from beneficiaries using the Part D benefit. But there was also increased drug use due to new indications for existing drugs, growth in several therapeutic classes, and rising use of specialty drugs such as injectable biologics.

The rising availability of generic drugs—and programs designed to encourage use of generics, such as smaller copays for that category—also drove an increase in pharmaceutical utilization. A $4 generic program offered by Wal-Mart contributed to that trend and also helped keep prices down, according to the CMS authors. Sixty-three percent of drugs dispensed in the United States in 2006 were generic, according to the report.

Overall, the CMS analysis shows that the largest category of health spending is still hospital care, which consumes 31% of the nation's health dollars. Other spending, which includes dental, home health, durable medical equipment, over-the-counter medications, public health, research, and capital equipment, consumes 25% of the health dollar. Physician and clinical services follow at 21%, then prescription drugs at 10%, administration at 7%, and nursing home care at 6%.

The authors said the data they had at hand and their analysis did not allow them to determine whether the prescription drug benefit had increased or lowered overall health care spending.

Richard Foster, the chief actuary at CMS, told reporters that the study showed that the “overall cost of prescription drugs has changed very little as a result of Part D.” A study by Consumers Union, however, seemed to refute that claim. (See box.)

Consumers Union: Drug Prices Up

Government economists have concluded that the Medicare Part D prescription drug benefit did not affect the price of pharmaceuticals in 2006, the program's first full year, but Consumers Union has issued a study charging that drug prices are indeed rising under the program.

Each month since December 2005, the consumer advocacy group has tracked the prices of five common drugs used by Medicare beneficiaries in one ZIP code in each of five states—California, New York, Illinois, Florida, and Texas. The data are taken directly from

Medicare.gov

Medicare beneficiaries might be bearing the brunt of price increases, because they usually are liable for a percentage of the drug's price as a copayment. “We're seeing a lot of inflation,” said Consumers Union Senior Policy Analyst Bill Vaughan in an interview.

The group also found that prices generally rise the most from December to January—after a beneficiary has locked into a plan for the upcoming year. The average increase for the five drugs as a package (Lipitor, Celebrex, Zoloft, nifedipine ER, and Altace) was $369 from December 2007 to January 2008, according to Consumers Union. “Most of these Medicare drug plans are increasing costs [at] double or triple the rate of inflation, which really torpedoes the insurance industry's claim that they are getting the best deal for seniors,” said Mr. Vaughan.

WASHINGTON — The nation spent $2 trillion, or $7,000 per person, on health care in 2006. While that was only a small increase from the previous year, America's prescription drug tab increased by 8.5%, fueled largely by the new Medicare Part D drug benefit.

Health spending as a share of the nation's gross domestic product continues to rise, hitting 16% in 2006.

Total spending on physician and clinical services grew 5.9% to $448 billion, the slowest rate of growth since 1999. Physician pay crawled almost to a halt, largely because of the freeze in Medicare's reimbursement rates in 2006. Private insurers seemed to have followed suit, said Cathy Cowan, an economist at the Centers for Medicare and Medicaid Services. Cowan, a coauthor of an annual analysis of the nation's health spending, spoke at a briefing on the report, which was published in the January/February issue of Health Affairs.

Spending on nursing home and home health declined from the previous year's growth. Spending still grew 3.5% in 2006, but that was less than the almost 5% increase in 2005.

Medicare had the fastest rate of growth since 1981, according to the report. Spending increased 19% in 2006 to $401 billion, driven largely by the prescription drug benefit and the cost of administration for that benefit and for Medicare Advantage, a managed care program.

Medicaid spending dropped for the first time since the program began in 1965. The 0.9% decrease was largely due to a large number of Medicaid enrollees who were shifted into Medicare for their prescription drugs.

Overall drug spending grew 8.5% in 2006—a far cry from the double-digit increases seen in the late 1990s, but still an increase from the 5.8% rise in spending in 2005. Half of the 2006 increase was due to greater utilization, not surprising given that about 23 million Medicare beneficiaries took advantage of the new benefit. Prescription prices increased by only a little over 3%, according to an annual analysis by actuaries at the Centers for Medicare and Medicaid Services.

The change in the drug rebate picture also contributed to rising drug costs. Under Medicaid, states received an average 30% rebate from drugmakers. Medicare, however, got only about 5% from manufacturers for the millions of beneficiaries who shifted out of Medicaid.

Medicare spent $41 billion on Part D in 2006, with $35 billion for drug purchases and $6 billion for administration and “net cost of insurance”—that is, the cost of subsidizing premiums for low-income beneficiaries and costs for transferring beneficiaries into private plans. Medicare paid for 18% of all retail drugs, compared with only 2% in 2005. Medicare took on costs that were previously covered by private insurers, Medicaid, and the uninsured. On average, each Part D enrollee received $1,700 in benefits, according to CMS.

The largest increase in drug utilization came from beneficiaries using the Part D benefit. But there was also increased drug use due to new indications for existing drugs, growth in several therapeutic classes, and rising use of specialty drugs such as injectable biologics.

The rising availability of generic drugs—and programs designed to encourage use of generics, such as smaller copays for that category—also drove an increase in pharmaceutical utilization. A $4 generic program offered by Wal-Mart contributed to that trend and also helped keep prices down, according to the CMS authors. Sixty-three percent of drugs dispensed in the United States in 2006 were generic, according to the report.

Overall, the CMS analysis shows that the largest category of health spending is still hospital care, which consumes 31% of the nation's health dollars. Other spending, which includes dental, home health, durable medical equipment, over-the-counter medications, public health, research, and capital equipment, consumes 25% of the health dollar. Physician and clinical services follow at 21%, then prescription drugs at 10%, administration at 7%, and nursing home care at 6%.

The authors said the data they had at hand and their analysis did not allow them to determine whether the prescription drug benefit had increased or lowered overall health care spending.

Richard Foster, the chief actuary at CMS, told reporters that the study showed that the “overall cost of prescription drugs has changed very little as a result of Part D.” A study by Consumers Union, however, seemed to refute that claim. (See box.)

Consumers Union: Drug Prices Up

Government economists have concluded that the Medicare Part D prescription drug benefit did not affect the price of pharmaceuticals in 2006, the program's first full year, but Consumers Union has issued a study charging that drug prices are indeed rising under the program.

Each month since December 2005, the consumer advocacy group has tracked the prices of five common drugs used by Medicare beneficiaries in one ZIP code in each of five states—California, New York, Illinois, Florida, and Texas. The data are taken directly from

Medicare.gov

Medicare beneficiaries might be bearing the brunt of price increases, because they usually are liable for a percentage of the drug's price as a copayment. “We're seeing a lot of inflation,” said Consumers Union Senior Policy Analyst Bill Vaughan in an interview.

The group also found that prices generally rise the most from December to January—after a beneficiary has locked into a plan for the upcoming year. The average increase for the five drugs as a package (Lipitor, Celebrex, Zoloft, nifedipine ER, and Altace) was $369 from December 2007 to January 2008, according to Consumers Union. “Most of these Medicare drug plans are increasing costs [at] double or triple the rate of inflation, which really torpedoes the insurance industry's claim that they are getting the best deal for seniors,” said Mr. Vaughan.

WASHINGTON — The Medicare Payment Advisory Commission has voted to recommend that Congress increase Medicare physician fees by 1.1% in 2009.

The recommendation will be included in MedPAC's final report to Congress next month but was discussed and voted on at a panel meeting in January.

The panel believes that physician fees should not be cut, said MedPAC chairman Glenn M. Hackbarth. “That's a very important message for us to convey to Congress.”

Before the vote, Mr. Hackbarth said the commission struggled each year to come up with the right numbers. “We try to zero in on the most appropriate update,” he said, adding that cost reports, physicians' access to capital, and beneficiaries' access to physician services all go into that calculation.

MedPAC staff member John Richardson told commissioners that it appears that most physicians continue to accept new Medicare patients, but there has been an increase in beneficiaries who said they had trouble finding a new primary care physician, according to a MedPAC survey. In 2006, 24% said they had trouble; by 2007, 30% of beneficiaries reported difficulty.

Medicare fees also are staying fairly steady as a percentage of private insurance fees, said Mr. Richardson. In 2005, Medicare paid 83% of what private insurers did, and in 2006, that had slipped slightly to 81%.

In December, Congress passed and the President signed a last-minute fix to the 2008 fee schedule, granting a 6-month, 0.5% increase for 2008. The fee increase, which included incentives for rural physicians, will cost about $3.1 billion, Mr. Richardson said.

Under current law, Medicare will cut physician fees by 5.5% in 2009. But when fees are renegotiated in July, the 2009 update could change.

MedPAC recommended that fees be increased in 2009 by the projected change in input prices (2.6%) minus the expected growth in productivity (1.5%), for a 1.1% increase. The cost: about $2 billion. The commission projected that spending would increase by another $8 billion out to 2011.

The commission also urged Congress to set up a system to measure and report physician resource use. The reporting should be confidential for 2 years. After that, the Centers for Medicare and Medicaid Services should establish a new payment system that takes into account both resource use and quality measures.

Dr. Ronald D. Castellanos, a physician in a group practice in Port Charlotte, Fla. and a MedPAC commissioner, said a recommendation for an increase was better than a cut, but that the 1.1% “doesn't keep up with our costs.” Physicians would not look happily on the recommended update. “Quite honestly, it's insulting,” he said. “The update is a blunt tool for trying to constrain costs,” said Dr. Castellanos, who voted against the update.

Dr. Nicholas Wolter, a commissioner who practices at a clinic in Billings, Montana, also said that he was not comfortable with the recommendation. “Unless we start focusing on other tactics, we're not going to get a handle on costs,” he said.

Mr. Hackbarth said the panel's recommendation should not be taken to mean that the commission believed that everything was fine with the reimbursement system, adding, “it's way bigger than that.”

WASHINGTON — The Medicare Payment Advisory Commission has voted to recommend that Congress increase Medicare physician fees by 1.1% in 2009.

The recommendation will be included in MedPAC's final report to Congress next month but was discussed and voted on at a panel meeting in January.

The panel believes that physician fees should not be cut, said MedPAC chairman Glenn M. Hackbarth. “That's a very important message for us to convey to Congress.”

Before the vote, Mr. Hackbarth said the commission struggled each year to come up with the right numbers. “We try to zero in on the most appropriate update,” he said, adding that cost reports, physicians' access to capital, and beneficiaries' access to physician services all go into that calculation.

MedPAC staff member John Richardson told commissioners that it appears that most physicians continue to accept new Medicare patients, but there has been an increase in beneficiaries who said they had trouble finding a new primary care physician, according to a MedPAC survey. In 2006, 24% said they had trouble; by 2007, 30% of beneficiaries reported difficulty.

Medicare fees also are staying fairly steady as a percentage of private insurance fees, said Mr. Richardson. In 2005, Medicare paid 83% of what private insurers did, and in 2006, that had slipped slightly to 81%.

In December, Congress passed and the President signed a last-minute fix to the 2008 fee schedule, granting a 6-month, 0.5% increase for 2008. The fee increase, which included incentives for rural physicians, will cost about $3.1 billion, Mr. Richardson said.

Under current law, Medicare will cut physician fees by 5.5% in 2009. But when fees are renegotiated in July, the 2009 update could change.

MedPAC recommended that fees be increased in 2009 by the projected change in input prices (2.6%) minus the expected growth in productivity (1.5%), for a 1.1% increase. The cost: about $2 billion. The commission projected that spending would increase by another $8 billion out to 2011.

The commission also urged Congress to set up a system to measure and report physician resource use. The reporting should be confidential for 2 years. After that, the Centers for Medicare and Medicaid Services should establish a new payment system that takes into account both resource use and quality measures.

Dr. Ronald D. Castellanos, a physician in a group practice in Port Charlotte, Fla. and a MedPAC commissioner, said a recommendation for an increase was better than a cut, but that the 1.1% “doesn't keep up with our costs.” Physicians would not look happily on the recommended update. “Quite honestly, it's insulting,” he said. “The update is a blunt tool for trying to constrain costs,” said Dr. Castellanos, who voted against the update.

Dr. Nicholas Wolter, a commissioner who practices at a clinic in Billings, Montana, also said that he was not comfortable with the recommendation. “Unless we start focusing on other tactics, we're not going to get a handle on costs,” he said.

Mr. Hackbarth said the panel's recommendation should not be taken to mean that the commission believed that everything was fine with the reimbursement system, adding, “it's way bigger than that.”

WASHINGTON — The Medicare Payment Advisory Commission has voted to recommend that Congress increase Medicare physician fees by 1.1% in 2009.

The recommendation will be included in MedPAC's final report to Congress next month but was discussed and voted on at a panel meeting in January.

The panel believes that physician fees should not be cut, said MedPAC chairman Glenn M. Hackbarth. “That's a very important message for us to convey to Congress.”

Before the vote, Mr. Hackbarth said the commission struggled each year to come up with the right numbers. “We try to zero in on the most appropriate update,” he said, adding that cost reports, physicians' access to capital, and beneficiaries' access to physician services all go into that calculation.

MedPAC staff member John Richardson told commissioners that it appears that most physicians continue to accept new Medicare patients, but there has been an increase in beneficiaries who said they had trouble finding a new primary care physician, according to a MedPAC survey. In 2006, 24% said they had trouble; by 2007, 30% of beneficiaries reported difficulty.

Medicare fees also are staying fairly steady as a percentage of private insurance fees, said Mr. Richardson. In 2005, Medicare paid 83% of what private insurers did, and in 2006, that had slipped slightly to 81%.

In December, Congress passed and the President signed a last-minute fix to the 2008 fee schedule, granting a 6-month, 0.5% increase for 2008. The fee increase, which included incentives for rural physicians, will cost about $3.1 billion, Mr. Richardson said.

Under current law, Medicare will cut physician fees by 5.5% in 2009. But when fees are renegotiated in July, the 2009 update could change.

MedPAC recommended that fees be increased in 2009 by the projected change in input prices (2.6%) minus the expected growth in productivity (1.5%), for a 1.1% increase. The cost: about $2 billion. The commission projected that spending would increase by another $8 billion out to 2011.

The commission also urged Congress to set up a system to measure and report physician resource use. The reporting should be confidential for 2 years. After that, the Centers for Medicare and Medicaid Services should establish a new payment system that takes into account both resource use and quality measures.

Dr. Ronald D. Castellanos, a physician in a group practice in Port Charlotte, Fla. and a MedPAC commissioner, said a recommendation for an increase was better than a cut, but that the 1.1% “doesn't keep up with our costs.” Physicians would not look happily on the recommended update. “Quite honestly, it's insulting,” he said. “The update is a blunt tool for trying to constrain costs,” said Dr. Castellanos, who voted against the update.

Dr. Nicholas Wolter, a commissioner who practices at a clinic in Billings, Montana, also said that he was not comfortable with the recommendation. “Unless we start focusing on other tactics, we're not going to get a handle on costs,” he said.

Mr. Hackbarth said the panel's recommendation should not be taken to mean that the commission believed that everything was fine with the reimbursement system, adding, “it's way bigger than that.”

SEATTLE — Patients who present with potential acute coronary syndrome might be most vulnerable to the downside of emergency department crowding, according to a small, single-center study at an academic medical center.

These patients eventually have worse outcomes, said Dr. Jesse Pines, who presented an analysis of 7 years of data from an ongoing prospective cohort study at the Hospital of the University of Pennsylvania, in Philadelphia, which has 55,000 annual patient visits. Dr. Pines, associate director of health care policy research at the university's emergency medicine department, spoke at the annual meeting of the American College of Emergency Physicians.

While there have been many studies of the impact of emergency department crowding and boarding (keeping patients who need inpatient care in emergency department rooms or hallways when the hospital has no beds to spare), few have focused specifically on patients with potential acute coronary syndrome, Dr. Pines said. And yet, there are 6 million ED visits a year for chest pain. Studies have shown that early treatment is very beneficial in ACS, so Dr. Pines and his colleagues wanted to gauge the impact of crowding or boarding—which can cause treatment delays—on potential ACS. Because ACS is difficult to identify, delays could have particularly crucial impacts on long-term outcomes.

Dr. Pines and his colleagues analyzed data from 6,869 patients who were older than 30 years and presented with chest pain. Fifty-seven percent (3,915) were women, and 69% (4,739) were African American. The mean age was 52 years.

Data were collected on patient characteristics and Thrombolysis in Myocardial Infarction scores, and outcomes were recorded for the 30 days following admittance to the hospital or discharge. The primary outcome was any cardiovascular event from 6 hours after arrival at the ED to 30 days out. Validated crowding measures were assigned at triage.

The researchers also took stock of process of care measures, including whether patients received an electrocardiogram within 10 minutes of arrival and whether they were prescribed aspirin and β-blockers in the ED.

Overall, 33% of the patients had an ECG, 57% received aspirin, and 80% were given β-blockers. Thirty-three percent of patients were treated and discharged, and 67% were admitted.

There were 301 cardiovascular complications in the overall cohort of 6,869 patients. Seventy-two patients died within 30 days.

The authors also tracked rehospitalization rates; so far, data are complete for 3,806 of the 6,869 patients. Ten percent (389) were readmitted within 30 days of the initial ED visit.

The median for patient-care hours was 98. This is the sum of all the hours that all the patients at that time had spent in the ED. Basically, if all patients were given a timer when they arrived, the patient-care hours would be all the hours on all the timers at any point, according to Dr. Pines. The ED occupancy rate was 60%, the number of patients in the waiting room was eight, and nine admitted patients were boarding in the ED.

The adjusted analysis showed that two factors were independently associated with increased incidence of cardiovascular complications in patients presenting with potential ACS: more than 12 patients in the waiting room, and total patient-care hours greater than 142, said Dr. Pines.

He and his colleagues also found that for all chest pain patients, increased ED occupancy rate, higher number of patients waiting, and higher total patient-care hours led to an increased risk of complications.

Because crowding seemed to affect both potential ACS and a subset of patients (12%, or 824 patients) who had unstable angina or myocardial infarction, it could be that crowding itself is not the problem but a symptom of overall hospital dysfunction, said Dr. Pines.

The hospital tends to function well for very sick patients, who are easily diagnosed and treated, he said. But it appears to do less well for patients whose conditions are less easily identified—particularly those with potential ACS.

Because ED crowding appears to be predictive of increased complications in those patients, Dr. Pines said, “to improve therapy of potential ACS, we should improve the crowding.”

SEATTLE — Patients who present with potential acute coronary syndrome might be most vulnerable to the downside of emergency department crowding, according to a small, single-center study at an academic medical center.

These patients eventually have worse outcomes, said Dr. Jesse Pines, who presented an analysis of 7 years of data from an ongoing prospective cohort study at the Hospital of the University of Pennsylvania, in Philadelphia, which has 55,000 annual patient visits. Dr. Pines, associate director of health care policy research at the university's emergency medicine department, spoke at the annual meeting of the American College of Emergency Physicians.

While there have been many studies of the impact of emergency department crowding and boarding (keeping patients who need inpatient care in emergency department rooms or hallways when the hospital has no beds to spare), few have focused specifically on patients with potential acute coronary syndrome, Dr. Pines said. And yet, there are 6 million ED visits a year for chest pain. Studies have shown that early treatment is very beneficial in ACS, so Dr. Pines and his colleagues wanted to gauge the impact of crowding or boarding—which can cause treatment delays—on potential ACS. Because ACS is difficult to identify, delays could have particularly crucial impacts on long-term outcomes.

Dr. Pines and his colleagues analyzed data from 6,869 patients who were older than 30 years and presented with chest pain. Fifty-seven percent (3,915) were women, and 69% (4,739) were African American. The mean age was 52 years.

Data were collected on patient characteristics and Thrombolysis in Myocardial Infarction scores, and outcomes were recorded for the 30 days following admittance to the hospital or discharge. The primary outcome was any cardiovascular event from 6 hours after arrival at the ED to 30 days out. Validated crowding measures were assigned at triage.

The researchers also took stock of process of care measures, including whether patients received an electrocardiogram within 10 minutes of arrival and whether they were prescribed aspirin and β-blockers in the ED.

Overall, 33% of the patients had an ECG, 57% received aspirin, and 80% were given β-blockers. Thirty-three percent of patients were treated and discharged, and 67% were admitted.

There were 301 cardiovascular complications in the overall cohort of 6,869 patients. Seventy-two patients died within 30 days.

The authors also tracked rehospitalization rates; so far, data are complete for 3,806 of the 6,869 patients. Ten percent (389) were readmitted within 30 days of the initial ED visit.

The median for patient-care hours was 98. This is the sum of all the hours that all the patients at that time had spent in the ED. Basically, if all patients were given a timer when they arrived, the patient-care hours would be all the hours on all the timers at any point, according to Dr. Pines. The ED occupancy rate was 60%, the number of patients in the waiting room was eight, and nine admitted patients were boarding in the ED.

The adjusted analysis showed that two factors were independently associated with increased incidence of cardiovascular complications in patients presenting with potential ACS: more than 12 patients in the waiting room, and total patient-care hours greater than 142, said Dr. Pines.

He and his colleagues also found that for all chest pain patients, increased ED occupancy rate, higher number of patients waiting, and higher total patient-care hours led to an increased risk of complications.

Because crowding seemed to affect both potential ACS and a subset of patients (12%, or 824 patients) who had unstable angina or myocardial infarction, it could be that crowding itself is not the problem but a symptom of overall hospital dysfunction, said Dr. Pines.

The hospital tends to function well for very sick patients, who are easily diagnosed and treated, he said. But it appears to do less well for patients whose conditions are less easily identified—particularly those with potential ACS.

Because ED crowding appears to be predictive of increased complications in those patients, Dr. Pines said, “to improve therapy of potential ACS, we should improve the crowding.”

SEATTLE — Patients who present with potential acute coronary syndrome might be most vulnerable to the downside of emergency department crowding, according to a small, single-center study at an academic medical center.

These patients eventually have worse outcomes, said Dr. Jesse Pines, who presented an analysis of 7 years of data from an ongoing prospective cohort study at the Hospital of the University of Pennsylvania, in Philadelphia, which has 55,000 annual patient visits. Dr. Pines, associate director of health care policy research at the university's emergency medicine department, spoke at the annual meeting of the American College of Emergency Physicians.

While there have been many studies of the impact of emergency department crowding and boarding (keeping patients who need inpatient care in emergency department rooms or hallways when the hospital has no beds to spare), few have focused specifically on patients with potential acute coronary syndrome, Dr. Pines said. And yet, there are 6 million ED visits a year for chest pain. Studies have shown that early treatment is very beneficial in ACS, so Dr. Pines and his colleagues wanted to gauge the impact of crowding or boarding—which can cause treatment delays—on potential ACS. Because ACS is difficult to identify, delays could have particularly crucial impacts on long-term outcomes.

Dr. Pines and his colleagues analyzed data from 6,869 patients who were older than 30 years and presented with chest pain. Fifty-seven percent (3,915) were women, and 69% (4,739) were African American. The mean age was 52 years.

Data were collected on patient characteristics and Thrombolysis in Myocardial Infarction scores, and outcomes were recorded for the 30 days following admittance to the hospital or discharge. The primary outcome was any cardiovascular event from 6 hours after arrival at the ED to 30 days out. Validated crowding measures were assigned at triage.

The researchers also took stock of process of care measures, including whether patients received an electrocardiogram within 10 minutes of arrival and whether they were prescribed aspirin and β-blockers in the ED.

Overall, 33% of the patients had an ECG, 57% received aspirin, and 80% were given β-blockers. Thirty-three percent of patients were treated and discharged, and 67% were admitted.

There were 301 cardiovascular complications in the overall cohort of 6,869 patients. Seventy-two patients died within 30 days.

The authors also tracked rehospitalization rates; so far, data are complete for 3,806 of the 6,869 patients. Ten percent (389) were readmitted within 30 days of the initial ED visit.

The median for patient-care hours was 98. This is the sum of all the hours that all the patients at that time had spent in the ED. Basically, if all patients were given a timer when they arrived, the patient-care hours would be all the hours on all the timers at any point, according to Dr. Pines. The ED occupancy rate was 60%, the number of patients in the waiting room was eight, and nine admitted patients were boarding in the ED.

The adjusted analysis showed that two factors were independently associated with increased incidence of cardiovascular complications in patients presenting with potential ACS: more than 12 patients in the waiting room, and total patient-care hours greater than 142, said Dr. Pines.

He and his colleagues also found that for all chest pain patients, increased ED occupancy rate, higher number of patients waiting, and higher total patient-care hours led to an increased risk of complications.

Because crowding seemed to affect both potential ACS and a subset of patients (12%, or 824 patients) who had unstable angina or myocardial infarction, it could be that crowding itself is not the problem but a symptom of overall hospital dysfunction, said Dr. Pines.

The hospital tends to function well for very sick patients, who are easily diagnosed and treated, he said. But it appears to do less well for patients whose conditions are less easily identified—particularly those with potential ACS.

Because ED crowding appears to be predictive of increased complications in those patients, Dr. Pines said, “to improve therapy of potential ACS, we should improve the crowding.”