Alicia Ault

WASHINGTON — Several individual physicians and professional organizations urged members of Congress to extend tax credits or deductions and small business loans to physicians who purchase information systems and to require Medicare to offer an incentive payment to physicians who make the move to electronic medical records.

Adopting electronic medical records (EMRs) can make practices more efficient, but the initial expense—both monetary and in staff training—can be devastating to small physician offices, the witnesses told the panel members at a House Small Business Subcommittee on Regulation, Healthcare and Trade hearing.

The Subcommittee chairman, Charles Gonzalez (D-Tex.), agreed that the federal government should give physicians some kind of financial carrot to invest in health information technology.

"Right now there are inadequate incentives for health care providers to adopt many of these technologies," he said.

"Without changes in the way we promote health IT, small physician practices will be left behind the technological curve, and as a result, patients will fail to benefit from the quality of care electronic health records provide," added Mr. Gonzalez, who recently reintroduced his National Health Information Incentive Act. The bill was aimed at assisting smaller practices but would also direct Medicare to make add-on payments for office visits facilitated by EMRs.

The American College of Physicians has called for just such a payment for several years, Dr. Lynne Kirk, ACP president, said at the hearing.

Mr. Gonzalez also noted that the full Small Business Committee recently passed the Small Business Lending Improvements Act of 2007 (H.R. 1332). That bill would let small practices borrow from the Small Business Administration to finance information systems.

Coming up with the capital for health IT is particularly tough for smaller physician groups, Dr. Kirk noted. One 2006 study showed that only 13%–16% of solo practitioners had adopted health IT, she said. Small practices are the lifeblood of internal medicine, she said, adding that 20% of internists are in solo practices and 50% are in practices of five or fewer physicians.

Acquisition costs average $44,000 per physician and yearly upkeep amounts to about $8,500 per physician, according to a 2005 study published in Health Affairs, Dr. Kirk said.

To help defray both the initial investment and ongoing maintenance costs, ACP advocates an add-on payment from Medicare scaled to the complexity of the technology. The initial capital costs could be offset by grants, loans, or tax credits from the federal government, Dr. Kirk said.

The lack of reimbursement for using health IT is a major obstacle to adoption, said Dr. Mark Leavitt, chairman of the Certification Commission for Healthcare Information Technology, a publicly funded agency that for the last year has been vetting hardware and software systems.

CCHIT has certified 57 office-based systems, he said. Some payers are now offering financial incentives to physicians who use these certified systems, Dr. Leavitt said. The Hawaii Medical Service Association (Blue Cross and Blue Shield of Hawaii) announced in November 2006 that it was setting aside $20 million to help individual physicians buy EMR systems, though it required those investments to be in CCHIT-certified systems.

Dr. Margaret Kelley, an obstetrician in a two-person practice with her father in San Antonio, said they had spent $100,000 to purchase an EMR system. Initially, the system devastated the practice's efficiency, said Dr. Kelley, who also spoke on behalf of the American College of Obstetricians and Gynecologists.

"It took our practice nearly 2 years to be able to accommodate as many patients as we could before we invested in our EMR system," Dr. Kelley said. Even so, they would not consider returning to their old way of practice, noting that one of the biggest benefits has been the ability to access patient charts 24 hours a day, she said.

Similarly, Dr. David O. Shober said that buying and implementing an EMR system at his two-physician family practice has been draining but beneficial. In 2004, the practice—then comprising four physicians and two offices—spent $200,000 to buy a system. Yearly costs have averaged $50,000-$60,000, said Dr. Shober, who is based in New Castle, Pa. The system has allowed the practice to create more thorough notes, standardize charts, and retrieve records easily and quickly. But the physicians have run into obstacles, including the inability of their system to communicate with radiology centers and labs, and the refusal of many pharmacies in their community to accept an e-prescription, he said.

"The only way to provide incentives for the adoption of health IT is to provide financial assistance," said Dr. Shober, adding that the federal government should make no-interest loans available.

Dr. Kevin Napier, an internist in a nine-physician family and internal medicine practice in Griffin, Ga., said that he and his colleagues had spent $400,000 for the purchase of a system and subsequent training since 2005. The physicians are financing the system at a cost of $1,000 a month each, and their payments will continue for the next 3 years, he said.

There was a huge drop in patient volume and income the first year of implementation, but the benefits have outweighed the risks, Dr. Napier said.

WASHINGTON — Several individual physicians and professional organizations urged members of Congress to extend tax credits or deductions and small business loans to physicians who purchase information systems and to require Medicare to offer an incentive payment to physicians who make the move to electronic medical records.

Adopting electronic medical records (EMRs) can make practices more efficient, but the initial expense—both monetary and in staff training—can be devastating to small physician offices, the witnesses told the panel members at a House Small Business Subcommittee on Regulation, Healthcare and Trade hearing.

The Subcommittee chairman, Charles Gonzalez (D-Tex.), agreed that the federal government should give physicians some kind of financial carrot to invest in health information technology.

"Right now there are inadequate incentives for health care providers to adopt many of these technologies," he said.

"Without changes in the way we promote health IT, small physician practices will be left behind the technological curve, and as a result, patients will fail to benefit from the quality of care electronic health records provide," added Mr. Gonzalez, who recently reintroduced his National Health Information Incentive Act. The bill was aimed at assisting smaller practices but would also direct Medicare to make add-on payments for office visits facilitated by EMRs.

The American College of Physicians has called for just such a payment for several years, Dr. Lynne Kirk, ACP president, said at the hearing.

Mr. Gonzalez also noted that the full Small Business Committee recently passed the Small Business Lending Improvements Act of 2007 (H.R. 1332). That bill would let small practices borrow from the Small Business Administration to finance information systems.

Coming up with the capital for health IT is particularly tough for smaller physician groups, Dr. Kirk noted. One 2006 study showed that only 13%–16% of solo practitioners had adopted health IT, she said. Small practices are the lifeblood of internal medicine, she said, adding that 20% of internists are in solo practices and 50% are in practices of five or fewer physicians.

Acquisition costs average $44,000 per physician and yearly upkeep amounts to about $8,500 per physician, according to a 2005 study published in Health Affairs, Dr. Kirk said.

To help defray both the initial investment and ongoing maintenance costs, ACP advocates an add-on payment from Medicare scaled to the complexity of the technology. The initial capital costs could be offset by grants, loans, or tax credits from the federal government, Dr. Kirk said.

The lack of reimbursement for using health IT is a major obstacle to adoption, said Dr. Mark Leavitt, chairman of the Certification Commission for Healthcare Information Technology, a publicly funded agency that for the last year has been vetting hardware and software systems.

CCHIT has certified 57 office-based systems, he said. Some payers are now offering financial incentives to physicians who use these certified systems, Dr. Leavitt said. The Hawaii Medical Service Association (Blue Cross and Blue Shield of Hawaii) announced in November 2006 that it was setting aside $20 million to help individual physicians buy EMR systems, though it required those investments to be in CCHIT-certified systems.

Dr. Margaret Kelley, an obstetrician in a two-person practice with her father in San Antonio, said they had spent $100,000 to purchase an EMR system. Initially, the system devastated the practice's efficiency, said Dr. Kelley, who also spoke on behalf of the American College of Obstetricians and Gynecologists.

"It took our practice nearly 2 years to be able to accommodate as many patients as we could before we invested in our EMR system," Dr. Kelley said. Even so, they would not consider returning to their old way of practice, noting that one of the biggest benefits has been the ability to access patient charts 24 hours a day, she said.

Similarly, Dr. David O. Shober said that buying and implementing an EMR system at his two-physician family practice has been draining but beneficial. In 2004, the practice—then comprising four physicians and two offices—spent $200,000 to buy a system. Yearly costs have averaged $50,000-$60,000, said Dr. Shober, who is based in New Castle, Pa. The system has allowed the practice to create more thorough notes, standardize charts, and retrieve records easily and quickly. But the physicians have run into obstacles, including the inability of their system to communicate with radiology centers and labs, and the refusal of many pharmacies in their community to accept an e-prescription, he said.

"The only way to provide incentives for the adoption of health IT is to provide financial assistance," said Dr. Shober, adding that the federal government should make no-interest loans available.

Dr. Kevin Napier, an internist in a nine-physician family and internal medicine practice in Griffin, Ga., said that he and his colleagues had spent $400,000 for the purchase of a system and subsequent training since 2005. The physicians are financing the system at a cost of $1,000 a month each, and their payments will continue for the next 3 years, he said.

There was a huge drop in patient volume and income the first year of implementation, but the benefits have outweighed the risks, Dr. Napier said.

WASHINGTON — Several individual physicians and professional organizations urged members of Congress to extend tax credits or deductions and small business loans to physicians who purchase information systems and to require Medicare to offer an incentive payment to physicians who make the move to electronic medical records.

Adopting electronic medical records (EMRs) can make practices more efficient, but the initial expense—both monetary and in staff training—can be devastating to small physician offices, the witnesses told the panel members at a House Small Business Subcommittee on Regulation, Healthcare and Trade hearing.

The Subcommittee chairman, Charles Gonzalez (D-Tex.), agreed that the federal government should give physicians some kind of financial carrot to invest in health information technology.

"Right now there are inadequate incentives for health care providers to adopt many of these technologies," he said.

"Without changes in the way we promote health IT, small physician practices will be left behind the technological curve, and as a result, patients will fail to benefit from the quality of care electronic health records provide," added Mr. Gonzalez, who recently reintroduced his National Health Information Incentive Act. The bill was aimed at assisting smaller practices but would also direct Medicare to make add-on payments for office visits facilitated by EMRs.

The American College of Physicians has called for just such a payment for several years, Dr. Lynne Kirk, ACP president, said at the hearing.

Mr. Gonzalez also noted that the full Small Business Committee recently passed the Small Business Lending Improvements Act of 2007 (H.R. 1332). That bill would let small practices borrow from the Small Business Administration to finance information systems.

Coming up with the capital for health IT is particularly tough for smaller physician groups, Dr. Kirk noted. One 2006 study showed that only 13%–16% of solo practitioners had adopted health IT, she said. Small practices are the lifeblood of internal medicine, she said, adding that 20% of internists are in solo practices and 50% are in practices of five or fewer physicians.

Acquisition costs average $44,000 per physician and yearly upkeep amounts to about $8,500 per physician, according to a 2005 study published in Health Affairs, Dr. Kirk said.

To help defray both the initial investment and ongoing maintenance costs, ACP advocates an add-on payment from Medicare scaled to the complexity of the technology. The initial capital costs could be offset by grants, loans, or tax credits from the federal government, Dr. Kirk said.

The lack of reimbursement for using health IT is a major obstacle to adoption, said Dr. Mark Leavitt, chairman of the Certification Commission for Healthcare Information Technology, a publicly funded agency that for the last year has been vetting hardware and software systems.

CCHIT has certified 57 office-based systems, he said. Some payers are now offering financial incentives to physicians who use these certified systems, Dr. Leavitt said. The Hawaii Medical Service Association (Blue Cross and Blue Shield of Hawaii) announced in November 2006 that it was setting aside $20 million to help individual physicians buy EMR systems, though it required those investments to be in CCHIT-certified systems.

Dr. Margaret Kelley, an obstetrician in a two-person practice with her father in San Antonio, said they had spent $100,000 to purchase an EMR system. Initially, the system devastated the practice's efficiency, said Dr. Kelley, who also spoke on behalf of the American College of Obstetricians and Gynecologists.

"It took our practice nearly 2 years to be able to accommodate as many patients as we could before we invested in our EMR system," Dr. Kelley said. Even so, they would not consider returning to their old way of practice, noting that one of the biggest benefits has been the ability to access patient charts 24 hours a day, she said.

Similarly, Dr. David O. Shober said that buying and implementing an EMR system at his two-physician family practice has been draining but beneficial. In 2004, the practice—then comprising four physicians and two offices—spent $200,000 to buy a system. Yearly costs have averaged $50,000-$60,000, said Dr. Shober, who is based in New Castle, Pa. The system has allowed the practice to create more thorough notes, standardize charts, and retrieve records easily and quickly. But the physicians have run into obstacles, including the inability of their system to communicate with radiology centers and labs, and the refusal of many pharmacies in their community to accept an e-prescription, he said.

"The only way to provide incentives for the adoption of health IT is to provide financial assistance," said Dr. Shober, adding that the federal government should make no-interest loans available.

Dr. Kevin Napier, an internist in a nine-physician family and internal medicine practice in Griffin, Ga., said that he and his colleagues had spent $400,000 for the purchase of a system and subsequent training since 2005. The physicians are financing the system at a cost of $1,000 a month each, and their payments will continue for the next 3 years, he said.

There was a huge drop in patient volume and income the first year of implementation, but the benefits have outweighed the risks, Dr. Napier said.

WASHINGTON — The U.S. health care delivery system should be overhauled to organize medical practice around "integrated care cycles" that are coordinated by a central physician and to reward physicians for providing value, Michael E. Porter said at a media briefing presented by the Journal of the American Medical Association.

The proposals are a shortened version of a book written by Mr. Porter, the Bishop William Lawrence University Professor at Harvard Business School, Boston, and his coauthor, Elizabeth Olmsted Teisberg of the University of Virginia's Darden Graduate School of Business, Charlottesville.

Mr. Porter and Ms. Teisberg said a value-based system has three principles: providing value for patients, organizing delivery of care around conditions and care cycles, and measuring results, preferably risk-adjusted outcomes that are measured over the full care cycle, not just a single care episode (JAMA 2007;297:1103–11).

"Physicians focused on value for patients will no longer see themselves as self-contained, isolated actors," the authors wrote. "Instead, they will build stronger professional connections with complementary specialists who contribute to patient care across the care cycles for their patients."

The authors pointed out that they do not advocate a single-payer system. They say instead that competition is healthy but the current system supports the wrong kind of competition.

It rewards physicians and health plans for taking patients away from one another or for shifting costs onto a competitor, rather than for providing value for the patient in the form of improved clinical outcomes, said the authors.

Physicians are in the best position to change the delivery of health care, they said. "Physicians have to get out of the bunker," Mr. Porter said at the briefing.

He said they could lead by becoming part of a care team and agreeing to accept a piece of a payment that would be bundled for the episode of care, not for an individual service. And they can take the lead in defining outcomes measurements, Mr. Porter said.

In the article, the authors said that pay for performance models are also going down the wrong track, because they are aimed only at getting physicians to comply with processes of care. That will not provide value to the patient and, with more and more such measures, will likely lead to micromanagement of medical practice, they said.

A study published the same week in the New England Journal of Medicine found that pay for performance proposals under Medicare aren't likely to work well under the current system, because patients' care is not being coordinated by a single provider. In fact, beneficiaries are seeing multiple physicians—typically seven physicians in four practices in a given year—which "impedes the ability of any one assigned provider to influence the overall quality of care for a given patient," wrote the investigators, who were with the Center for Studying Health System Change and the Memorial Sloan-Kettering Cancer Center's Health Outcomes Research Group (N. Engl. J. Med. 2007;356:1130–9).

Mr. Porter and Ms. Teisberg envision a future in which most physicians are allied in partnerships or working for large group practices or staff-model managed care organizations, so that the care can be delivered more efficiently.

Their model is similar to the medical home concept that's being promoted by the American College of Physicians and the American Academy of Family Physicians. Under the concept, insurers would provide a bundled payment to a physician to coordinate care and there would be a pay-for-performance element based on patient outcomes.

Medicare will pay for a 3-year, eight-state demonstration of the medical home, and ACP and AAFP are working with IBM on testing such a program with its employees in Austin, Tex.

WASHINGTON — The U.S. health care delivery system should be overhauled to organize medical practice around "integrated care cycles" that are coordinated by a central physician and to reward physicians for providing value, Michael E. Porter said at a media briefing presented by the Journal of the American Medical Association.

The proposals are a shortened version of a book written by Mr. Porter, the Bishop William Lawrence University Professor at Harvard Business School, Boston, and his coauthor, Elizabeth Olmsted Teisberg of the University of Virginia's Darden Graduate School of Business, Charlottesville.

Mr. Porter and Ms. Teisberg said a value-based system has three principles: providing value for patients, organizing delivery of care around conditions and care cycles, and measuring results, preferably risk-adjusted outcomes that are measured over the full care cycle, not just a single care episode (JAMA 2007;297:1103–11).

"Physicians focused on value for patients will no longer see themselves as self-contained, isolated actors," the authors wrote. "Instead, they will build stronger professional connections with complementary specialists who contribute to patient care across the care cycles for their patients."

The authors pointed out that they do not advocate a single-payer system. They say instead that competition is healthy but the current system supports the wrong kind of competition.

It rewards physicians and health plans for taking patients away from one another or for shifting costs onto a competitor, rather than for providing value for the patient in the form of improved clinical outcomes, said the authors.

Physicians are in the best position to change the delivery of health care, they said. "Physicians have to get out of the bunker," Mr. Porter said at the briefing.

He said they could lead by becoming part of a care team and agreeing to accept a piece of a payment that would be bundled for the episode of care, not for an individual service. And they can take the lead in defining outcomes measurements, Mr. Porter said.

In the article, the authors said that pay for performance models are also going down the wrong track, because they are aimed only at getting physicians to comply with processes of care. That will not provide value to the patient and, with more and more such measures, will likely lead to micromanagement of medical practice, they said.

A study published the same week in the New England Journal of Medicine found that pay for performance proposals under Medicare aren't likely to work well under the current system, because patients' care is not being coordinated by a single provider. In fact, beneficiaries are seeing multiple physicians—typically seven physicians in four practices in a given year—which "impedes the ability of any one assigned provider to influence the overall quality of care for a given patient," wrote the investigators, who were with the Center for Studying Health System Change and the Memorial Sloan-Kettering Cancer Center's Health Outcomes Research Group (N. Engl. J. Med. 2007;356:1130–9).

Mr. Porter and Ms. Teisberg envision a future in which most physicians are allied in partnerships or working for large group practices or staff-model managed care organizations, so that the care can be delivered more efficiently.

Their model is similar to the medical home concept that's being promoted by the American College of Physicians and the American Academy of Family Physicians. Under the concept, insurers would provide a bundled payment to a physician to coordinate care and there would be a pay-for-performance element based on patient outcomes.

Medicare will pay for a 3-year, eight-state demonstration of the medical home, and ACP and AAFP are working with IBM on testing such a program with its employees in Austin, Tex.

WASHINGTON — The U.S. health care delivery system should be overhauled to organize medical practice around "integrated care cycles" that are coordinated by a central physician and to reward physicians for providing value, Michael E. Porter said at a media briefing presented by the Journal of the American Medical Association.

The proposals are a shortened version of a book written by Mr. Porter, the Bishop William Lawrence University Professor at Harvard Business School, Boston, and his coauthor, Elizabeth Olmsted Teisberg of the University of Virginia's Darden Graduate School of Business, Charlottesville.

Mr. Porter and Ms. Teisberg said a value-based system has three principles: providing value for patients, organizing delivery of care around conditions and care cycles, and measuring results, preferably risk-adjusted outcomes that are measured over the full care cycle, not just a single care episode (JAMA 2007;297:1103–11).

"Physicians focused on value for patients will no longer see themselves as self-contained, isolated actors," the authors wrote. "Instead, they will build stronger professional connections with complementary specialists who contribute to patient care across the care cycles for their patients."

The authors pointed out that they do not advocate a single-payer system. They say instead that competition is healthy but the current system supports the wrong kind of competition.

It rewards physicians and health plans for taking patients away from one another or for shifting costs onto a competitor, rather than for providing value for the patient in the form of improved clinical outcomes, said the authors.

Physicians are in the best position to change the delivery of health care, they said. "Physicians have to get out of the bunker," Mr. Porter said at the briefing.

He said they could lead by becoming part of a care team and agreeing to accept a piece of a payment that would be bundled for the episode of care, not for an individual service. And they can take the lead in defining outcomes measurements, Mr. Porter said.

In the article, the authors said that pay for performance models are also going down the wrong track, because they are aimed only at getting physicians to comply with processes of care. That will not provide value to the patient and, with more and more such measures, will likely lead to micromanagement of medical practice, they said.

A study published the same week in the New England Journal of Medicine found that pay for performance proposals under Medicare aren't likely to work well under the current system, because patients' care is not being coordinated by a single provider. In fact, beneficiaries are seeing multiple physicians—typically seven physicians in four practices in a given year—which "impedes the ability of any one assigned provider to influence the overall quality of care for a given patient," wrote the investigators, who were with the Center for Studying Health System Change and the Memorial Sloan-Kettering Cancer Center's Health Outcomes Research Group (N. Engl. J. Med. 2007;356:1130–9).

Mr. Porter and Ms. Teisberg envision a future in which most physicians are allied in partnerships or working for large group practices or staff-model managed care organizations, so that the care can be delivered more efficiently.

Their model is similar to the medical home concept that's being promoted by the American College of Physicians and the American Academy of Family Physicians. Under the concept, insurers would provide a bundled payment to a physician to coordinate care and there would be a pay-for-performance element based on patient outcomes.

Medicare will pay for a 3-year, eight-state demonstration of the medical home, and ACP and AAFP are working with IBM on testing such a program with its employees in Austin, Tex.

AAD Announces 2008 Officers

The American Academy of Dermatology has a new president-elect for 2008: Dr. David M. Pariser, a professor of dermatology at Eastern Virginia Medical School in Norfolk. Dr. Pariser has served as AAD Secretary-Treasurer and as president of the Virginia Dermatological Society. He will take on his new role in February 2008; at the same time, Dr. Evan R. Farmer will join him as vice president-elect. Dr. Farmer is a professor of dermatology at Johns Hopkins University, Baltimore, and a clinical professor of dermatology and pathology at Virginia Commonwealth University, Richmond. Results of the AAD election were announced in early April. Four new board members were elected also: Dr. Lisa A. Garner, Dr. David J. Goldberg, Dr. Victor J. Marks, and Dr. Elise A. Olsen.

Botox Top Procedure Again

Echoing recently released 2006 survey data from the American Society for Aesthetic Plastic Surgery (ASAPS), the American Academy of Facial Plastic and Reconstructive Surgery (AAFPRS) reported that Botox was the most popular nonsurgical cosmetic procedure performed by its members last year. Approximately 118 board-certified members responded to the survey, stating that they performed an average 384 Botox procedures each during the last year. Eighty-one percent of nonsurgical procedures were performed on women, with microdermabrasion, chemical peels, and hyaluronic acid injections following Botox in popularity. For men, the most popular procedure was microdermabrasion, and that was followed by Botox, hair transplants, chemical peels, and hyaluronic acid injections.

ASDS Report on Tissue Tightening

In an attempt to distill the latest data available, the American Society for Dermatologic Surgery has issued a technology report on radiofrequency and laser-based technologies to tighten tissue. The report outlines suitable candidates for the procedure and its contraindications, and describes the devices available. It concludes that "clinical results can be variable" for the procedure, and that "immediate collagen tightening and long-term thermal collagen remodeling appear to be the primary mechanisms of action." The report is available at

www.aboutskinsurgery.org

CMS Extends NPI Deadline…

The Centers for Medicare and Medicaid Services (CMS) announced that it is giving physicians and other entities (except small health plans) an extra year to acquire and start using National Provider Identifiers. The deadline to be in compliance was May 23, but now, "covered entities that have been making a good faith effort to comply with the NPI provisions may, for up to 12 months, implement contingency plans that could include accepting legacy provider numbers on HIPAA transactions in order to maintain operations and cash flows," said CMS Acting Administrator Leslie Norwalk in a statement. CMS decided to extend the deadline "after it became apparent that many covered entities would not be able to fully comply with the NPI standard" by the original deadline, Ms. Norwalk said. The new compliance guideline is available on the agency's Web site and explains what is considered a "good faith effort" to comply.

And Form CMS-1500 Deadline

CMS also has extended the deadline for filing Medicare claims using its new version of claims form CMS-1500, because of formatting errors on the revised form, the agency announced. The original deadline for switching to the new form, known as CMS-1500 (08–05) was April 2. But CMS said in March that contractors have been directed to continue to accept the old form until the agency notifies them to stop. In addition, the agency advised physicians who must use the form to use legacy provider numbers, as the form cannot accommodate an NPI number.

Changing MD Demographics

A major demographic shift is underway in medicine as female physicians become more numerous, and this trend will influence the way medical groups recruit and retain physicians throughout their career cycles, according to the 2006 Retention Survey from the American Medical Group Association and Cejka Search, an executive search organization. In 2006, female physicians accounted for 35% of physicians employed in the medical groups responding to the survey, compared with 28% in the previous survey. The study revealed that factors such as "poor cultural fit" and family issues are the driving forces in physician turnover. Part-time and flexible work options also are growing in importance, the survey found.

AAD Announces 2008 Officers

The American Academy of Dermatology has a new president-elect for 2008: Dr. David M. Pariser, a professor of dermatology at Eastern Virginia Medical School in Norfolk. Dr. Pariser has served as AAD Secretary-Treasurer and as president of the Virginia Dermatological Society. He will take on his new role in February 2008; at the same time, Dr. Evan R. Farmer will join him as vice president-elect. Dr. Farmer is a professor of dermatology at Johns Hopkins University, Baltimore, and a clinical professor of dermatology and pathology at Virginia Commonwealth University, Richmond. Results of the AAD election were announced in early April. Four new board members were elected also: Dr. Lisa A. Garner, Dr. David J. Goldberg, Dr. Victor J. Marks, and Dr. Elise A. Olsen.

Botox Top Procedure Again

Echoing recently released 2006 survey data from the American Society for Aesthetic Plastic Surgery (ASAPS), the American Academy of Facial Plastic and Reconstructive Surgery (AAFPRS) reported that Botox was the most popular nonsurgical cosmetic procedure performed by its members last year. Approximately 118 board-certified members responded to the survey, stating that they performed an average 384 Botox procedures each during the last year. Eighty-one percent of nonsurgical procedures were performed on women, with microdermabrasion, chemical peels, and hyaluronic acid injections following Botox in popularity. For men, the most popular procedure was microdermabrasion, and that was followed by Botox, hair transplants, chemical peels, and hyaluronic acid injections.

ASDS Report on Tissue Tightening

In an attempt to distill the latest data available, the American Society for Dermatologic Surgery has issued a technology report on radiofrequency and laser-based technologies to tighten tissue. The report outlines suitable candidates for the procedure and its contraindications, and describes the devices available. It concludes that "clinical results can be variable" for the procedure, and that "immediate collagen tightening and long-term thermal collagen remodeling appear to be the primary mechanisms of action." The report is available at

www.aboutskinsurgery.org

CMS Extends NPI Deadline…

The Centers for Medicare and Medicaid Services (CMS) announced that it is giving physicians and other entities (except small health plans) an extra year to acquire and start using National Provider Identifiers. The deadline to be in compliance was May 23, but now, "covered entities that have been making a good faith effort to comply with the NPI provisions may, for up to 12 months, implement contingency plans that could include accepting legacy provider numbers on HIPAA transactions in order to maintain operations and cash flows," said CMS Acting Administrator Leslie Norwalk in a statement. CMS decided to extend the deadline "after it became apparent that many covered entities would not be able to fully comply with the NPI standard" by the original deadline, Ms. Norwalk said. The new compliance guideline is available on the agency's Web site and explains what is considered a "good faith effort" to comply.

And Form CMS-1500 Deadline

CMS also has extended the deadline for filing Medicare claims using its new version of claims form CMS-1500, because of formatting errors on the revised form, the agency announced. The original deadline for switching to the new form, known as CMS-1500 (08–05) was April 2. But CMS said in March that contractors have been directed to continue to accept the old form until the agency notifies them to stop. In addition, the agency advised physicians who must use the form to use legacy provider numbers, as the form cannot accommodate an NPI number.

Changing MD Demographics

A major demographic shift is underway in medicine as female physicians become more numerous, and this trend will influence the way medical groups recruit and retain physicians throughout their career cycles, according to the 2006 Retention Survey from the American Medical Group Association and Cejka Search, an executive search organization. In 2006, female physicians accounted for 35% of physicians employed in the medical groups responding to the survey, compared with 28% in the previous survey. The study revealed that factors such as "poor cultural fit" and family issues are the driving forces in physician turnover. Part-time and flexible work options also are growing in importance, the survey found.

AAD Announces 2008 Officers

The American Academy of Dermatology has a new president-elect for 2008: Dr. David M. Pariser, a professor of dermatology at Eastern Virginia Medical School in Norfolk. Dr. Pariser has served as AAD Secretary-Treasurer and as president of the Virginia Dermatological Society. He will take on his new role in February 2008; at the same time, Dr. Evan R. Farmer will join him as vice president-elect. Dr. Farmer is a professor of dermatology at Johns Hopkins University, Baltimore, and a clinical professor of dermatology and pathology at Virginia Commonwealth University, Richmond. Results of the AAD election were announced in early April. Four new board members were elected also: Dr. Lisa A. Garner, Dr. David J. Goldberg, Dr. Victor J. Marks, and Dr. Elise A. Olsen.

Botox Top Procedure Again

Echoing recently released 2006 survey data from the American Society for Aesthetic Plastic Surgery (ASAPS), the American Academy of Facial Plastic and Reconstructive Surgery (AAFPRS) reported that Botox was the most popular nonsurgical cosmetic procedure performed by its members last year. Approximately 118 board-certified members responded to the survey, stating that they performed an average 384 Botox procedures each during the last year. Eighty-one percent of nonsurgical procedures were performed on women, with microdermabrasion, chemical peels, and hyaluronic acid injections following Botox in popularity. For men, the most popular procedure was microdermabrasion, and that was followed by Botox, hair transplants, chemical peels, and hyaluronic acid injections.

ASDS Report on Tissue Tightening

In an attempt to distill the latest data available, the American Society for Dermatologic Surgery has issued a technology report on radiofrequency and laser-based technologies to tighten tissue. The report outlines suitable candidates for the procedure and its contraindications, and describes the devices available. It concludes that "clinical results can be variable" for the procedure, and that "immediate collagen tightening and long-term thermal collagen remodeling appear to be the primary mechanisms of action." The report is available at

www.aboutskinsurgery.org

CMS Extends NPI Deadline…

The Centers for Medicare and Medicaid Services (CMS) announced that it is giving physicians and other entities (except small health plans) an extra year to acquire and start using National Provider Identifiers. The deadline to be in compliance was May 23, but now, "covered entities that have been making a good faith effort to comply with the NPI provisions may, for up to 12 months, implement contingency plans that could include accepting legacy provider numbers on HIPAA transactions in order to maintain operations and cash flows," said CMS Acting Administrator Leslie Norwalk in a statement. CMS decided to extend the deadline "after it became apparent that many covered entities would not be able to fully comply with the NPI standard" by the original deadline, Ms. Norwalk said. The new compliance guideline is available on the agency's Web site and explains what is considered a "good faith effort" to comply.

And Form CMS-1500 Deadline

CMS also has extended the deadline for filing Medicare claims using its new version of claims form CMS-1500, because of formatting errors on the revised form, the agency announced. The original deadline for switching to the new form, known as CMS-1500 (08–05) was April 2. But CMS said in March that contractors have been directed to continue to accept the old form until the agency notifies them to stop. In addition, the agency advised physicians who must use the form to use legacy provider numbers, as the form cannot accommodate an NPI number.

Changing MD Demographics

A major demographic shift is underway in medicine as female physicians become more numerous, and this trend will influence the way medical groups recruit and retain physicians throughout their career cycles, according to the 2006 Retention Survey from the American Medical Group Association and Cejka Search, an executive search organization. In 2006, female physicians accounted for 35% of physicians employed in the medical groups responding to the survey, compared with 28% in the previous survey. The study revealed that factors such as "poor cultural fit" and family issues are the driving forces in physician turnover. Part-time and flexible work options also are growing in importance, the survey found.

WASHINGTON — Accumulating data suggest that botulinum toxin and injectable fillers are as safe and effective in ethnic minorities as they are in white patients, Dr. Gary Monheit said at the annual meeting of the American Academy of Dermatology.

Although most of the evidence supporting the use of botulinum toxin and fillers has come from whites, leading to hesitation about use in darker skin types, those modalities are likely to be the first ones used in ethnic minority patients, because the initial sign of aging in darker skin tends to be volume loss, leading to frown lines, marionette lines, nasolabial folds, and upper forehead lines, said Dr. Monheit of the University of Alabama, Birmingham.

Botox injection is the most common cosmetic procedure, with some 2.8 million Americans receiving a treatment in 2004, according to Dr. Monheit. Almost 19% of the injections were in minorities (8.5% in Hispanics, 6.2% in blacks, and 4.2% in Asians), he said.

The most commonly injected areas for white patients are the forehead and brow area. In black patients, crow's feet generally aren't a concern; more commonly, the brows, forehead, and frown lines are targeted.

Variables to consider with ethnic minorities include facial structure and musculature; the histology of thick skin, collagen, and elastin fibers; atrophy resulting from photoaging; and "sociocultural factors that may make one not want to totally paralyze the face" and lose certain expressions, Dr. Monheit said.

Botox dosages have been standardized for whites but not for other ethnic groups, which has led to questions of safety and effectiveness in those minorities, he said.

A study led by Dr. Pearl E. Grimes of the University of California, Los Angeles, may give dermatologists some direction, he said. The trial was funded by Allergan Inc. and has not yet been published. A total of 31 black women, aged 18–67 years and with Fitzpatrick skin types V and VI, were randomized to 20 or 30 units of Botox, in five divided doses to the glabella. They were assessed at 30, 60, 90, and 120 days.

Their outcomes were compared with results from a dose-ranging study in whites that was also funded by Allergan (J. Derm. Surg. 1992;18:17–21).

The therapy's longevity appeared to be the same in the black women as in white women, Dr. Monheit noted.

At 1 month, 94% of those receiving 20 units and 100% of those receiving 30 units were considered responders. The response dipped to 20% for 20 units and 40% for 30 units at day 90. Patient satisfaction was 100% on day 30 and 60% on day 120.

There was less than a 4% incidence of adverse events—mainly headache and tingling—and the authors concluded that Botox is safe, efficacious, and well tolerated in women of color, he said.

When using fillers in minorities, it is important to consider what and how much volume is missing, and what areas are to be treated.

Again, there has been little published specifically on the safety and efficacy of the older fillers, such as collagen and hyaluronic acid-based fillers, Dr. Monheit said.

Anecdotally, there have been reports of more bruising, increased postinflammatory hyperpigmentation, keloids, and granuloma.

"All of these are fears that patients bring to us, but at this point there's no real solid data to counteract these [fears]," Dr. Monheit stated.

A postmarketing study—funded by Genzyme Corp. and Inamed Corp. and led by Dr. Grimes and Dr. Monheit—may provide some answers.

The multicenter trial, the results of which have not been published, was done at the behest of the Food and Drug Administration. The agency was concerned about the side effects of hyaluronic acid-based fillers in darker skin types. In the trial, 55 nonwhites—the preponderance Hispanic and Asian, with about 10% African American—were compared with 261 white controls.

A total of 27 minority patients received Zyplast and 28 were given Hylaform. They were compared with 128 white Zyplast recipients and 133 who received Hylaform.

According to Dr. Monheit, the results were similar for both fillers in the minorities when compared with results in the white patients at 2 and 12 weeks.

There were no keloids or granulomas in minority patients. Interestingly, both fillers were better tolerated in nonwhites. Some of the initial adverse events reported by white patients—such as erythema—seem to be masked by darker skin, he said.

It is not clear whether these results can be extrapolated to other fillers or for other areas of the face, and more questions will likely arise as new fillers—especially those that stimulate collagen development—come to the market, Dr. Monheit said.

For now, though, it appears that the safety and efficacy of Botox and fillers are at least comparable in whites and ethnic minorities, he said.

Dr. Monheit said that he is an investigator and consultant for most of the neurotoxin and filler manufacturers.

In an unpublished postmarketing study, Zyplast and Hylaform were better tolerated in nonwhite patients. DR. MONHEIT

WASHINGTON — Accumulating data suggest that botulinum toxin and injectable fillers are as safe and effective in ethnic minorities as they are in white patients, Dr. Gary Monheit said at the annual meeting of the American Academy of Dermatology.

Although most of the evidence supporting the use of botulinum toxin and fillers has come from whites, leading to hesitation about use in darker skin types, those modalities are likely to be the first ones used in ethnic minority patients, because the initial sign of aging in darker skin tends to be volume loss, leading to frown lines, marionette lines, nasolabial folds, and upper forehead lines, said Dr. Monheit of the University of Alabama, Birmingham.

Botox injection is the most common cosmetic procedure, with some 2.8 million Americans receiving a treatment in 2004, according to Dr. Monheit. Almost 19% of the injections were in minorities (8.5% in Hispanics, 6.2% in blacks, and 4.2% in Asians), he said.

The most commonly injected areas for white patients are the forehead and brow area. In black patients, crow's feet generally aren't a concern; more commonly, the brows, forehead, and frown lines are targeted.

Variables to consider with ethnic minorities include facial structure and musculature; the histology of thick skin, collagen, and elastin fibers; atrophy resulting from photoaging; and "sociocultural factors that may make one not want to totally paralyze the face" and lose certain expressions, Dr. Monheit said.

Botox dosages have been standardized for whites but not for other ethnic groups, which has led to questions of safety and effectiveness in those minorities, he said.

A study led by Dr. Pearl E. Grimes of the University of California, Los Angeles, may give dermatologists some direction, he said. The trial was funded by Allergan Inc. and has not yet been published. A total of 31 black women, aged 18–67 years and with Fitzpatrick skin types V and VI, were randomized to 20 or 30 units of Botox, in five divided doses to the glabella. They were assessed at 30, 60, 90, and 120 days.

Their outcomes were compared with results from a dose-ranging study in whites that was also funded by Allergan (J. Derm. Surg. 1992;18:17–21).

The therapy's longevity appeared to be the same in the black women as in white women, Dr. Monheit noted.

At 1 month, 94% of those receiving 20 units and 100% of those receiving 30 units were considered responders. The response dipped to 20% for 20 units and 40% for 30 units at day 90. Patient satisfaction was 100% on day 30 and 60% on day 120.

There was less than a 4% incidence of adverse events—mainly headache and tingling—and the authors concluded that Botox is safe, efficacious, and well tolerated in women of color, he said.

When using fillers in minorities, it is important to consider what and how much volume is missing, and what areas are to be treated.

Again, there has been little published specifically on the safety and efficacy of the older fillers, such as collagen and hyaluronic acid-based fillers, Dr. Monheit said.

Anecdotally, there have been reports of more bruising, increased postinflammatory hyperpigmentation, keloids, and granuloma.

"All of these are fears that patients bring to us, but at this point there's no real solid data to counteract these [fears]," Dr. Monheit stated.

A postmarketing study—funded by Genzyme Corp. and Inamed Corp. and led by Dr. Grimes and Dr. Monheit—may provide some answers.

The multicenter trial, the results of which have not been published, was done at the behest of the Food and Drug Administration. The agency was concerned about the side effects of hyaluronic acid-based fillers in darker skin types. In the trial, 55 nonwhites—the preponderance Hispanic and Asian, with about 10% African American—were compared with 261 white controls.

A total of 27 minority patients received Zyplast and 28 were given Hylaform. They were compared with 128 white Zyplast recipients and 133 who received Hylaform.

According to Dr. Monheit, the results were similar for both fillers in the minorities when compared with results in the white patients at 2 and 12 weeks.

There were no keloids or granulomas in minority patients. Interestingly, both fillers were better tolerated in nonwhites. Some of the initial adverse events reported by white patients—such as erythema—seem to be masked by darker skin, he said.

It is not clear whether these results can be extrapolated to other fillers or for other areas of the face, and more questions will likely arise as new fillers—especially those that stimulate collagen development—come to the market, Dr. Monheit said.

For now, though, it appears that the safety and efficacy of Botox and fillers are at least comparable in whites and ethnic minorities, he said.

Dr. Monheit said that he is an investigator and consultant for most of the neurotoxin and filler manufacturers.

In an unpublished postmarketing study, Zyplast and Hylaform were better tolerated in nonwhite patients. DR. MONHEIT

WASHINGTON — Accumulating data suggest that botulinum toxin and injectable fillers are as safe and effective in ethnic minorities as they are in white patients, Dr. Gary Monheit said at the annual meeting of the American Academy of Dermatology.

Although most of the evidence supporting the use of botulinum toxin and fillers has come from whites, leading to hesitation about use in darker skin types, those modalities are likely to be the first ones used in ethnic minority patients, because the initial sign of aging in darker skin tends to be volume loss, leading to frown lines, marionette lines, nasolabial folds, and upper forehead lines, said Dr. Monheit of the University of Alabama, Birmingham.

Botox injection is the most common cosmetic procedure, with some 2.8 million Americans receiving a treatment in 2004, according to Dr. Monheit. Almost 19% of the injections were in minorities (8.5% in Hispanics, 6.2% in blacks, and 4.2% in Asians), he said.

The most commonly injected areas for white patients are the forehead and brow area. In black patients, crow's feet generally aren't a concern; more commonly, the brows, forehead, and frown lines are targeted.

Variables to consider with ethnic minorities include facial structure and musculature; the histology of thick skin, collagen, and elastin fibers; atrophy resulting from photoaging; and "sociocultural factors that may make one not want to totally paralyze the face" and lose certain expressions, Dr. Monheit said.

Botox dosages have been standardized for whites but not for other ethnic groups, which has led to questions of safety and effectiveness in those minorities, he said.

A study led by Dr. Pearl E. Grimes of the University of California, Los Angeles, may give dermatologists some direction, he said. The trial was funded by Allergan Inc. and has not yet been published. A total of 31 black women, aged 18–67 years and with Fitzpatrick skin types V and VI, were randomized to 20 or 30 units of Botox, in five divided doses to the glabella. They were assessed at 30, 60, 90, and 120 days.

Their outcomes were compared with results from a dose-ranging study in whites that was also funded by Allergan (J. Derm. Surg. 1992;18:17–21).

The therapy's longevity appeared to be the same in the black women as in white women, Dr. Monheit noted.

At 1 month, 94% of those receiving 20 units and 100% of those receiving 30 units were considered responders. The response dipped to 20% for 20 units and 40% for 30 units at day 90. Patient satisfaction was 100% on day 30 and 60% on day 120.

There was less than a 4% incidence of adverse events—mainly headache and tingling—and the authors concluded that Botox is safe, efficacious, and well tolerated in women of color, he said.

When using fillers in minorities, it is important to consider what and how much volume is missing, and what areas are to be treated.

Again, there has been little published specifically on the safety and efficacy of the older fillers, such as collagen and hyaluronic acid-based fillers, Dr. Monheit said.

Anecdotally, there have been reports of more bruising, increased postinflammatory hyperpigmentation, keloids, and granuloma.

"All of these are fears that patients bring to us, but at this point there's no real solid data to counteract these [fears]," Dr. Monheit stated.

A postmarketing study—funded by Genzyme Corp. and Inamed Corp. and led by Dr. Grimes and Dr. Monheit—may provide some answers.

The multicenter trial, the results of which have not been published, was done at the behest of the Food and Drug Administration. The agency was concerned about the side effects of hyaluronic acid-based fillers in darker skin types. In the trial, 55 nonwhites—the preponderance Hispanic and Asian, with about 10% African American—were compared with 261 white controls.

A total of 27 minority patients received Zyplast and 28 were given Hylaform. They were compared with 128 white Zyplast recipients and 133 who received Hylaform.

According to Dr. Monheit, the results were similar for both fillers in the minorities when compared with results in the white patients at 2 and 12 weeks.

There were no keloids or granulomas in minority patients. Interestingly, both fillers were better tolerated in nonwhites. Some of the initial adverse events reported by white patients—such as erythema—seem to be masked by darker skin, he said.

It is not clear whether these results can be extrapolated to other fillers or for other areas of the face, and more questions will likely arise as new fillers—especially those that stimulate collagen development—come to the market, Dr. Monheit said.

For now, though, it appears that the safety and efficacy of Botox and fillers are at least comparable in whites and ethnic minorities, he said.

Dr. Monheit said that he is an investigator and consultant for most of the neurotoxin and filler manufacturers.

In an unpublished postmarketing study, Zyplast and Hylaform were better tolerated in nonwhite patients. DR. MONHEIT

WASHINGTON — The U.S. health care delivery system should be overhauled to organize medical practice around “integrated care cycles” that are coordinated by a central physician and to reward physicians for providing value, Michael E. Porter said at a media briefing presented by the Journal of the American Medical Association.

The proposals are a shortened version of a book written by Mr. Porter, the Bishop William Lawrence University Professor at Harvard Business School, and his coauthor, Elizabeth Olmsted Teisberg of the University of Virginia's Darden Graduate School of Business.

According to Mr. Porter and Ms. Teisberg, a value-based system has three principles: providing value for patients, organizing delivery of care around conditions and care cycles, and measuring results, preferably risk-adjusted outcomes that are measured over the full cycle of care, not just an individual care episode (JAMA 2007;297:1103–11).

“Physicians focused on value for patients will no longer see themselves as self-contained, isolated actors,” the authors wrote. “Instead, they will build stronger professional connections with complementary specialists who contribute to patient care across the care cycles for their patients.”

The authors pointed out that they do not advocate a single-payer system. They say instead that competition is healthy but the current system supports the wrong kind of competition.

It rewards physicians and health plans for taking patients away from one another or for shifting costs onto a competitor, rather than for providing value for the patient in the form of improved clinical outcomes, said the authors.

Physicians are in the best position to change the delivery of health care, the researchers said.

“Physicians have to get out of the bunker,” Mr. Porter said at the briefing.

He said they could lead by becoming part of a care team and agreeing to accept a piece of a payment that would be bundled for the episode of care, not for an individual service. And they can take the lead in defining outcomes measurements, Mr. Porter said.

In the article, the authors said that pay-for-performance models are also going down the wrong track, because they are aimed only at getting physicians to comply with processes of care. That will not provide value to the patient and, with more and more such measures, will likely lead to micromanagement of medical practice, they said.

A study published the same week in March in the New England Journal of Medicine found that pay-for-performance proposals under Medicare aren't likely to work well under the current system, because patients' care is not being coordinated by a single provider.

In fact, beneficiaries are seeing multiple physicians—typically seven physicians in four practices in a given year—which “impedes the ability of any one assigned provider to influence the overall quality of care for a given patient,” wrote the investigators, who were with the Center for Studying Health System Change and the Memorial Sloan-Kettering Cancer Center's Health Outcomes Research Group (N. Engl. J. Med. 2007;356:1130–9).

Mr. Porter and Ms. Teisberg envision a future where most physicians are allied in partnerships or working for large group practices or staff-model managed care organizations, so that the care can be delivered more efficiently.

Their model is similar to the medical home concept that's being promoted by the American College of Physicians and the American Academy of Family Physicians. Under the concept, physicians would provide a bundled payment to a physician to coordinate care and there would be a pay-for-performance element based on patient outcomes.

Medicare will pay for a 3-year, eight-state demonstration of the medical home, and ACP and AAFP are working with IBM on testing such a program with its employees in Austin, Tex.

WASHINGTON — The U.S. health care delivery system should be overhauled to organize medical practice around “integrated care cycles” that are coordinated by a central physician and to reward physicians for providing value, Michael E. Porter said at a media briefing presented by the Journal of the American Medical Association.

The proposals are a shortened version of a book written by Mr. Porter, the Bishop William Lawrence University Professor at Harvard Business School, and his coauthor, Elizabeth Olmsted Teisberg of the University of Virginia's Darden Graduate School of Business.

According to Mr. Porter and Ms. Teisberg, a value-based system has three principles: providing value for patients, organizing delivery of care around conditions and care cycles, and measuring results, preferably risk-adjusted outcomes that are measured over the full cycle of care, not just an individual care episode (JAMA 2007;297:1103–11).

“Physicians focused on value for patients will no longer see themselves as self-contained, isolated actors,” the authors wrote. “Instead, they will build stronger professional connections with complementary specialists who contribute to patient care across the care cycles for their patients.”

The authors pointed out that they do not advocate a single-payer system. They say instead that competition is healthy but the current system supports the wrong kind of competition.

It rewards physicians and health plans for taking patients away from one another or for shifting costs onto a competitor, rather than for providing value for the patient in the form of improved clinical outcomes, said the authors.

Physicians are in the best position to change the delivery of health care, the researchers said.

“Physicians have to get out of the bunker,” Mr. Porter said at the briefing.

He said they could lead by becoming part of a care team and agreeing to accept a piece of a payment that would be bundled for the episode of care, not for an individual service. And they can take the lead in defining outcomes measurements, Mr. Porter said.

In the article, the authors said that pay-for-performance models are also going down the wrong track, because they are aimed only at getting physicians to comply with processes of care. That will not provide value to the patient and, with more and more such measures, will likely lead to micromanagement of medical practice, they said.

A study published the same week in March in the New England Journal of Medicine found that pay-for-performance proposals under Medicare aren't likely to work well under the current system, because patients' care is not being coordinated by a single provider.

In fact, beneficiaries are seeing multiple physicians—typically seven physicians in four practices in a given year—which “impedes the ability of any one assigned provider to influence the overall quality of care for a given patient,” wrote the investigators, who were with the Center for Studying Health System Change and the Memorial Sloan-Kettering Cancer Center's Health Outcomes Research Group (N. Engl. J. Med. 2007;356:1130–9).

Mr. Porter and Ms. Teisberg envision a future where most physicians are allied in partnerships or working for large group practices or staff-model managed care organizations, so that the care can be delivered more efficiently.

Their model is similar to the medical home concept that's being promoted by the American College of Physicians and the American Academy of Family Physicians. Under the concept, physicians would provide a bundled payment to a physician to coordinate care and there would be a pay-for-performance element based on patient outcomes.

Medicare will pay for a 3-year, eight-state demonstration of the medical home, and ACP and AAFP are working with IBM on testing such a program with its employees in Austin, Tex.

WASHINGTON — The U.S. health care delivery system should be overhauled to organize medical practice around “integrated care cycles” that are coordinated by a central physician and to reward physicians for providing value, Michael E. Porter said at a media briefing presented by the Journal of the American Medical Association.

The proposals are a shortened version of a book written by Mr. Porter, the Bishop William Lawrence University Professor at Harvard Business School, and his coauthor, Elizabeth Olmsted Teisberg of the University of Virginia's Darden Graduate School of Business.

According to Mr. Porter and Ms. Teisberg, a value-based system has three principles: providing value for patients, organizing delivery of care around conditions and care cycles, and measuring results, preferably risk-adjusted outcomes that are measured over the full cycle of care, not just an individual care episode (JAMA 2007;297:1103–11).

“Physicians focused on value for patients will no longer see themselves as self-contained, isolated actors,” the authors wrote. “Instead, they will build stronger professional connections with complementary specialists who contribute to patient care across the care cycles for their patients.”

The authors pointed out that they do not advocate a single-payer system. They say instead that competition is healthy but the current system supports the wrong kind of competition.

It rewards physicians and health plans for taking patients away from one another or for shifting costs onto a competitor, rather than for providing value for the patient in the form of improved clinical outcomes, said the authors.

Physicians are in the best position to change the delivery of health care, the researchers said.

“Physicians have to get out of the bunker,” Mr. Porter said at the briefing.

He said they could lead by becoming part of a care team and agreeing to accept a piece of a payment that would be bundled for the episode of care, not for an individual service. And they can take the lead in defining outcomes measurements, Mr. Porter said.

In the article, the authors said that pay-for-performance models are also going down the wrong track, because they are aimed only at getting physicians to comply with processes of care. That will not provide value to the patient and, with more and more such measures, will likely lead to micromanagement of medical practice, they said.

A study published the same week in March in the New England Journal of Medicine found that pay-for-performance proposals under Medicare aren't likely to work well under the current system, because patients' care is not being coordinated by a single provider.

In fact, beneficiaries are seeing multiple physicians—typically seven physicians in four practices in a given year—which “impedes the ability of any one assigned provider to influence the overall quality of care for a given patient,” wrote the investigators, who were with the Center for Studying Health System Change and the Memorial Sloan-Kettering Cancer Center's Health Outcomes Research Group (N. Engl. J. Med. 2007;356:1130–9).

Mr. Porter and Ms. Teisberg envision a future where most physicians are allied in partnerships or working for large group practices or staff-model managed care organizations, so that the care can be delivered more efficiently.

Their model is similar to the medical home concept that's being promoted by the American College of Physicians and the American Academy of Family Physicians. Under the concept, physicians would provide a bundled payment to a physician to coordinate care and there would be a pay-for-performance element based on patient outcomes.

Medicare will pay for a 3-year, eight-state demonstration of the medical home, and ACP and AAFP are working with IBM on testing such a program with its employees in Austin, Tex.

WASHINGTON — Food and Drug Administration officials said in March they have started several new initiatives in response to the Institute of Medicine's call to upgrade and overhaul its drug safety efforts.

The projects, including a pilot project to more closely monitor the postmarketing safety of four new molecular entities and a plan to put more postmarketing data on the agency's Web site, were revealed at a meeting sponsored by the IOM.

In a September 2006 report that lambasted the FDA's safety oversight, the IOM called on the agency to issue an interim report on selected drugs' postmarketing safety at least 18 months, and no longer than 5 years, after launch.

“Five years is too late to find out what a drug is doing,” said Dr. Robert Temple, the FDA's associate director for medical policy. The Center for Drug Evaluation and Research (CDER) has begun a pilot project with four new molecular entities to gather data at 1, 2, and 3 years after launch, he said. He declined to name the drugs.

The agency also plans to publish a newsletter on its Web site to provide up-to-date information on a drug's postmarketing experience, said Dr. Ellis Unger, acting deputy director for science at CDER's Office of Surveillance and Epidemiology.

The IOM report also urged Congress to give the FDA greater and more precise enforcement powers, partly to compel drug manufacturers to fulfill their commitments to gather postmarketing data.

Peter Barton Hutt, a former FDA general counsel and now senior counsel with Covington & Burling in Washington, said the agency already has all the enforcement power it needs, but that it needs more funding outside of the user fees it collects.

Critics have said the agency is unduly beholden to industry because of user fees. Former FDA Deputy Commissioner Mary Pendergast said those fees were likely to make up 80% of the agency's drug review and safety budget if Congress did not provide additional money for 2007.

In a report to Congress (fiscal 2006), 63% of postmarketing studies had not been started. The agency needs a better hammer to get those studies done, she said.

WASHINGTON — Food and Drug Administration officials said in March they have started several new initiatives in response to the Institute of Medicine's call to upgrade and overhaul its drug safety efforts.

The projects, including a pilot project to more closely monitor the postmarketing safety of four new molecular entities and a plan to put more postmarketing data on the agency's Web site, were revealed at a meeting sponsored by the IOM.

In a September 2006 report that lambasted the FDA's safety oversight, the IOM called on the agency to issue an interim report on selected drugs' postmarketing safety at least 18 months, and no longer than 5 years, after launch.

“Five years is too late to find out what a drug is doing,” said Dr. Robert Temple, the FDA's associate director for medical policy. The Center for Drug Evaluation and Research (CDER) has begun a pilot project with four new molecular entities to gather data at 1, 2, and 3 years after launch, he said. He declined to name the drugs.

The agency also plans to publish a newsletter on its Web site to provide up-to-date information on a drug's postmarketing experience, said Dr. Ellis Unger, acting deputy director for science at CDER's Office of Surveillance and Epidemiology.

The IOM report also urged Congress to give the FDA greater and more precise enforcement powers, partly to compel drug manufacturers to fulfill their commitments to gather postmarketing data.

Peter Barton Hutt, a former FDA general counsel and now senior counsel with Covington & Burling in Washington, said the agency already has all the enforcement power it needs, but that it needs more funding outside of the user fees it collects.

Critics have said the agency is unduly beholden to industry because of user fees. Former FDA Deputy Commissioner Mary Pendergast said those fees were likely to make up 80% of the agency's drug review and safety budget if Congress did not provide additional money for 2007.

In a report to Congress (fiscal 2006), 63% of postmarketing studies had not been started. The agency needs a better hammer to get those studies done, she said.

WASHINGTON — Food and Drug Administration officials said in March they have started several new initiatives in response to the Institute of Medicine's call to upgrade and overhaul its drug safety efforts.

The projects, including a pilot project to more closely monitor the postmarketing safety of four new molecular entities and a plan to put more postmarketing data on the agency's Web site, were revealed at a meeting sponsored by the IOM.

In a September 2006 report that lambasted the FDA's safety oversight, the IOM called on the agency to issue an interim report on selected drugs' postmarketing safety at least 18 months, and no longer than 5 years, after launch.

“Five years is too late to find out what a drug is doing,” said Dr. Robert Temple, the FDA's associate director for medical policy. The Center for Drug Evaluation and Research (CDER) has begun a pilot project with four new molecular entities to gather data at 1, 2, and 3 years after launch, he said. He declined to name the drugs.

The agency also plans to publish a newsletter on its Web site to provide up-to-date information on a drug's postmarketing experience, said Dr. Ellis Unger, acting deputy director for science at CDER's Office of Surveillance and Epidemiology.

The IOM report also urged Congress to give the FDA greater and more precise enforcement powers, partly to compel drug manufacturers to fulfill their commitments to gather postmarketing data.

Peter Barton Hutt, a former FDA general counsel and now senior counsel with Covington & Burling in Washington, said the agency already has all the enforcement power it needs, but that it needs more funding outside of the user fees it collects.

Critics have said the agency is unduly beholden to industry because of user fees. Former FDA Deputy Commissioner Mary Pendergast said those fees were likely to make up 80% of the agency's drug review and safety budget if Congress did not provide additional money for 2007.

In a report to Congress (fiscal 2006), 63% of postmarketing studies had not been started. The agency needs a better hammer to get those studies done, she said.

NEW ORLEANS — An American Red Cross program that offers subsidies for mental health care to people affected by hurricanes on the Gulf Coast has been so undersubscribed that the organization is extending the deadline to apply and the period in which benefits will be offered by 6 months.

The Red Cross also has doubled the amount of money available to each applicant—from $1,000 to $2,000.

Anyone—even if he or she did not live in one of the affected Zip codes—who lost a family member may be eligible to receive benefits.

The organization is reluctant to give out figures on how many people have used benefits under the Access to Care program and how many it hopes to accommodate. Jeanne Ellinport, director of communications for hurricane recovery at the Red Cross, said in an interview that there is a cap on the amount of money that will be distributed, but that the program has not come close to reaching that limit.

One psychiatrist who's been trying to get the word out about the program—Dr. Grayson S. Norquist, professor and chairman of the department of psychiatry and human behavior at the University of Mississippi Medical Center in Jackson—said he had been told that as many as 40,000 people could receive benefits and that only about half that many have done so.

Access to Care was launched in late September 2006, about a year after hurricanes Katrina, Rita, and Wilma ravaged the Gulf Coast of Louisiana and Mississippi, as well as New Orleans and parts of Alabama, Florida, and Texas. It was modeled after a program instituted in New York after the attacks of Sept. 11, 2001, according to Jacqueline Yannacci, program manager, emotional support for recovery, at the Red Cross.

Both the Sept. 11 program and the hurricane-related program are administered by the Mental Health Association of New York City.

Past experience has shown that depression, anxiety, and posttraumatic stress disorder tend to hit the hardest about a year after a disaster, hence the September 2006 launch, Ms. Yannacci said.

Those eligible for Access to Care are people who lived, before the hurricanes hit, in a Zip code affected by one of the three storms—about 133 counties in Texas, Louisiana, Mississippi, Alabama, and south Florida, Ms. Yannacci said. The residents have to provide proof of residence in those areas before the storm. While that might be close to impossible for storm victims whose homes were flooded or wiped out by winds or a storm surge, Ms. Yannacci said the Red Cross does everything possible to help people get proof. Those who received assistance from the Red Cross are in an organization database; in some instances, case managers call utilities or do other detective work to get residency proof, she said.

Applicants have to show that the storms had a significant impact on their lives—for instance, that they had been displaced from their homes for longer than 2 weeks, had lost their home or job, or their children had been uprooted and placed in a new school. If the “significant impact” criteria are met, even people who no longer live in those areas are eligible.

Initially, applications had to be received by Oct. 1, 2007; that has now been extended to March 30, 2008. Services will be covered from Aug. 30, 2005, to Sept. 30, 2008—instead of April 1, 2008. Claims can be filed as late as Dec. 30, 2008.

The Red Cross also removed a big potential hurdle for applicants. Initially, they had to use insurance benefits—if they had them—before they could receive Access to Care funds. Now, if they are accepted into the program, applicants can make use of up to $2,000 without using their insurance first. The payments can be made directly to providers—psychiatrists, social workers, psychologists, even acupuncturists. The money can be used for counseling, acupuncture, testing and evaluation of children up to age 21, and psychotropic medications.

Dr. Norquist said few of those who might use Access to Care—and few of his psychiatric colleagues on the Gulf Coast—know about the program, he said in an interview.

A major issue for Gulf Coast residents who might want to seek psychiatric care is the continuing shortage of health providers. Mississippi Gulf Coast clinics have about 75% of the staff they had before the hurricane, and they are seeing as many or more patients, Dr. Norquist said.

Meanwhile, the Metropolitan Human Services District (MHSD), a semiregional agency in charge of providing and managing publicly provided mental health and substance abuse services, is collaborating with the Red Cross to increase awareness of Access to Care. But a change in strategy might be needed, said Dr. Jerome Gibbs, executive director of the MHSD. “We need to think about how we market and label the services we provide,” he said, noting that for many people, there is still a stigma attached to seeking care for a mental health issue.

For more information about the Access to Care program, go to www.a2care.com

NEW ORLEANS — An American Red Cross program that offers subsidies for mental health care to people affected by hurricanes on the Gulf Coast has been so undersubscribed that the organization is extending the deadline to apply and the period in which benefits will be offered by 6 months.

The Red Cross also has doubled the amount of money available to each applicant—from $1,000 to $2,000.

Anyone—even if he or she did not live in one of the affected Zip codes—who lost a family member may be eligible to receive benefits.

The organization is reluctant to give out figures on how many people have used benefits under the Access to Care program and how many it hopes to accommodate. Jeanne Ellinport, director of communications for hurricane recovery at the Red Cross, said in an interview that there is a cap on the amount of money that will be distributed, but that the program has not come close to reaching that limit.

One psychiatrist who's been trying to get the word out about the program—Dr. Grayson S. Norquist, professor and chairman of the department of psychiatry and human behavior at the University of Mississippi Medical Center in Jackson—said he had been told that as many as 40,000 people could receive benefits and that only about half that many have done so.

Access to Care was launched in late September 2006, about a year after hurricanes Katrina, Rita, and Wilma ravaged the Gulf Coast of Louisiana and Mississippi, as well as New Orleans and parts of Alabama, Florida, and Texas. It was modeled after a program instituted in New York after the attacks of Sept. 11, 2001, according to Jacqueline Yannacci, program manager, emotional support for recovery, at the Red Cross.

Both the Sept. 11 program and the hurricane-related program are administered by the Mental Health Association of New York City.

Past experience has shown that depression, anxiety, and posttraumatic stress disorder tend to hit the hardest about a year after a disaster, hence the September 2006 launch, Ms. Yannacci said.

Those eligible for Access to Care are people who lived, before the hurricanes hit, in a Zip code affected by one of the three storms—about 133 counties in Texas, Louisiana, Mississippi, Alabama, and south Florida, Ms. Yannacci said. The residents have to provide proof of residence in those areas before the storm. While that might be close to impossible for storm victims whose homes were flooded or wiped out by winds or a storm surge, Ms. Yannacci said the Red Cross does everything possible to help people get proof. Those who received assistance from the Red Cross are in an organization database; in some instances, case managers call utilities or do other detective work to get residency proof, she said.

Applicants have to show that the storms had a significant impact on their lives—for instance, that they had been displaced from their homes for longer than 2 weeks, had lost their home or job, or their children had been uprooted and placed in a new school. If the “significant impact” criteria are met, even people who no longer live in those areas are eligible.

Initially, applications had to be received by Oct. 1, 2007; that has now been extended to March 30, 2008. Services will be covered from Aug. 30, 2005, to Sept. 30, 2008—instead of April 1, 2008. Claims can be filed as late as Dec. 30, 2008.

The Red Cross also removed a big potential hurdle for applicants. Initially, they had to use insurance benefits—if they had them—before they could receive Access to Care funds. Now, if they are accepted into the program, applicants can make use of up to $2,000 without using their insurance first. The payments can be made directly to providers—psychiatrists, social workers, psychologists, even acupuncturists. The money can be used for counseling, acupuncture, testing and evaluation of children up to age 21, and psychotropic medications.

Dr. Norquist said few of those who might use Access to Care—and few of his psychiatric colleagues on the Gulf Coast—know about the program, he said in an interview.

A major issue for Gulf Coast residents who might want to seek psychiatric care is the continuing shortage of health providers. Mississippi Gulf Coast clinics have about 75% of the staff they had before the hurricane, and they are seeing as many or more patients, Dr. Norquist said.

Meanwhile, the Metropolitan Human Services District (MHSD), a semiregional agency in charge of providing and managing publicly provided mental health and substance abuse services, is collaborating with the Red Cross to increase awareness of Access to Care. But a change in strategy might be needed, said Dr. Jerome Gibbs, executive director of the MHSD. “We need to think about how we market and label the services we provide,” he said, noting that for many people, there is still a stigma attached to seeking care for a mental health issue.

For more information about the Access to Care program, go to www.a2care.com

NEW ORLEANS — An American Red Cross program that offers subsidies for mental health care to people affected by hurricanes on the Gulf Coast has been so undersubscribed that the organization is extending the deadline to apply and the period in which benefits will be offered by 6 months.

The Red Cross also has doubled the amount of money available to each applicant—from $1,000 to $2,000.

Anyone—even if he or she did not live in one of the affected Zip codes—who lost a family member may be eligible to receive benefits.

The organization is reluctant to give out figures on how many people have used benefits under the Access to Care program and how many it hopes to accommodate. Jeanne Ellinport, director of communications for hurricane recovery at the Red Cross, said in an interview that there is a cap on the amount of money that will be distributed, but that the program has not come close to reaching that limit.

One psychiatrist who's been trying to get the word out about the program—Dr. Grayson S. Norquist, professor and chairman of the department of psychiatry and human behavior at the University of Mississippi Medical Center in Jackson—said he had been told that as many as 40,000 people could receive benefits and that only about half that many have done so.

Access to Care was launched in late September 2006, about a year after hurricanes Katrina, Rita, and Wilma ravaged the Gulf Coast of Louisiana and Mississippi, as well as New Orleans and parts of Alabama, Florida, and Texas. It was modeled after a program instituted in New York after the attacks of Sept. 11, 2001, according to Jacqueline Yannacci, program manager, emotional support for recovery, at the Red Cross.

Both the Sept. 11 program and the hurricane-related program are administered by the Mental Health Association of New York City.

Past experience has shown that depression, anxiety, and posttraumatic stress disorder tend to hit the hardest about a year after a disaster, hence the September 2006 launch, Ms. Yannacci said.

Those eligible for Access to Care are people who lived, before the hurricanes hit, in a Zip code affected by one of the three storms—about 133 counties in Texas, Louisiana, Mississippi, Alabama, and south Florida, Ms. Yannacci said. The residents have to provide proof of residence in those areas before the storm. While that might be close to impossible for storm victims whose homes were flooded or wiped out by winds or a storm surge, Ms. Yannacci said the Red Cross does everything possible to help people get proof. Those who received assistance from the Red Cross are in an organization database; in some instances, case managers call utilities or do other detective work to get residency proof, she said.

Applicants have to show that the storms had a significant impact on their lives—for instance, that they had been displaced from their homes for longer than 2 weeks, had lost their home or job, or their children had been uprooted and placed in a new school. If the “significant impact” criteria are met, even people who no longer live in those areas are eligible.

Initially, applications had to be received by Oct. 1, 2007; that has now been extended to March 30, 2008. Services will be covered from Aug. 30, 2005, to Sept. 30, 2008—instead of April 1, 2008. Claims can be filed as late as Dec. 30, 2008.

The Red Cross also removed a big potential hurdle for applicants. Initially, they had to use insurance benefits—if they had them—before they could receive Access to Care funds. Now, if they are accepted into the program, applicants can make use of up to $2,000 without using their insurance first. The payments can be made directly to providers—psychiatrists, social workers, psychologists, even acupuncturists. The money can be used for counseling, acupuncture, testing and evaluation of children up to age 21, and psychotropic medications.

Dr. Norquist said few of those who might use Access to Care—and few of his psychiatric colleagues on the Gulf Coast—know about the program, he said in an interview.

A major issue for Gulf Coast residents who might want to seek psychiatric care is the continuing shortage of health providers. Mississippi Gulf Coast clinics have about 75% of the staff they had before the hurricane, and they are seeing as many or more patients, Dr. Norquist said.

Meanwhile, the Metropolitan Human Services District (MHSD), a semiregional agency in charge of providing and managing publicly provided mental health and substance abuse services, is collaborating with the Red Cross to increase awareness of Access to Care. But a change in strategy might be needed, said Dr. Jerome Gibbs, executive director of the MHSD. “We need to think about how we market and label the services we provide,” he said, noting that for many people, there is still a stigma attached to seeking care for a mental health issue.

For more information about the Access to Care program, go to www.a2care.com

WASHINGTON — Several individual physicians and professional organizations urged members of Congress to extend tax credits or deductions and small business loans to physicians who purchase information systems and to require Medicare to offer incentive payments to physicians who adopt electronic medical records.

Electronic medical records (EMRs) can make practices more efficient, but the initial expense—both monetary and in staff training—can be devastating to small physician offices, the witnesses told the panel members at a House Small Business Subcommittee on Regulation, Healthcare and Trade hearing.

Subcommittee chairman Charles Gonzalez (D-Tex.) agreed that the federal government should give physicians some kind of financial carrot to invest in health information technology. “Without changes in the way we promote health IT, small physician practices will be left behind the technological curve, and as a result, patients will fail to benefit from the quality of care electronic health records provide,” said Mr. Gonzalez, who recently reintroduced his National Health Information Incentive Act. The bill was aimed at assisting smaller practices but would also direct Medicare to make add-on payments for office visits facilitated by EMRs.

The American College of Physicians has called for just such a payment for several years, Dr. Lynne Kirk, ACP president, said at the hearing.

Mr. Gonzalez noted that the full Small Business Committee had recently passed the Small Business Lending Improvements Act of 2007 (H.R. 1332). The bill would let small practices borrow from the Small Business Administration to finance information systems.

Coming up with the capital for health IT is particularly tough for smaller physician groups, Dr. Kirk noted. One 2006 study showed that only 13%–16% of solo practitioners had adopted health IT, she said. Small practices are the lifeblood of internal medicine, she said, adding that 20% of internists are in solo practices and 50% are in practices of five or fewer physicians.

Acquisition costs average $44,000 per physician and yearly upkeep amounts to about $8,500 per physician, according to a 2005 study published in Health Affairs, Dr. Kirk said. ACP advocates an add-on payment from Medicare scaled to the complexity of the technology, as well as grants, loans, or tax credits from the federal government, Dr. Kirk said.

The lack of reimbursement for using health IT is a major obstacle to adoption, said Dr. Mark Leavitt, chairman of the Certification Commission for Healthcare Information Technology, a publicly funded agency that for the last year has been vetting hardware and software systems. CCHIT has certified 57 office-based systems, he said. Some payers are now offering financial incentives to physicians who use these certified systems, Dr. Leavitt said.

Dr. Margaret Kelley, an obstetrician in a two-person practice with her father in San Antonio, said they had spent $100,000 to purchase an EMR system. Initially, the system devastated the practice's efficiency, said Dr. Kelley, who also spoke on behalf of the American College of Obstetricians and Gynecologists.

“It took our practice nearly 2 years to be able to accommodate as many patients as we could before we invested in our EMR system,” Dr. Kelley said. Even so, they would not consider returning to their old way of practice, noting that one of the biggest benefits has been access to patient charts 24 hours a day, she said.

Dr. David O. Shober said that implementing an EMR system at his two-physician family practice has been draining but beneficial. In 2004, the practice—four physicians and two offices—spent $200,000 to buy a system. Yearly costs have averaged $50,000–$60,000, said Dr. Shober, who is based in New Castle, Pa. The system has allowed the practice to create more thorough notes, standardize charts, and retrieve records easily and quickly. But the system can't communicate with radiology centers and labs, and many local pharmacies refuse to accept an e-prescription, he said.

“The only way to provide incentives for the adoption of health IT is to provide financial assistance,” said Dr. Shober, adding that the federal government should make no-interest loans available.

Dr. Kevin Napier, an internist in a nine-physician family and internal medicine practice in Griffin, Ga., said that he and his colleagues had spent $400,000 for the purchase of a system and subsequent training since 2005. There was a huge drop in patient volume and income the first year of implementation, but the benefits have outweighed the risks, Dr. Napier said.

WASHINGTON — Several individual physicians and professional organizations urged members of Congress to extend tax credits or deductions and small business loans to physicians who purchase information systems and to require Medicare to offer incentive payments to physicians who adopt electronic medical records.

Electronic medical records (EMRs) can make practices more efficient, but the initial expense—both monetary and in staff training—can be devastating to small physician offices, the witnesses told the panel members at a House Small Business Subcommittee on Regulation, Healthcare and Trade hearing.

Subcommittee chairman Charles Gonzalez (D-Tex.) agreed that the federal government should give physicians some kind of financial carrot to invest in health information technology. “Without changes in the way we promote health IT, small physician practices will be left behind the technological curve, and as a result, patients will fail to benefit from the quality of care electronic health records provide,” said Mr. Gonzalez, who recently reintroduced his National Health Information Incentive Act. The bill was aimed at assisting smaller practices but would also direct Medicare to make add-on payments for office visits facilitated by EMRs.

The American College of Physicians has called for just such a payment for several years, Dr. Lynne Kirk, ACP president, said at the hearing.

Mr. Gonzalez noted that the full Small Business Committee had recently passed the Small Business Lending Improvements Act of 2007 (H.R. 1332). The bill would let small practices borrow from the Small Business Administration to finance information systems.

Coming up with the capital for health IT is particularly tough for smaller physician groups, Dr. Kirk noted. One 2006 study showed that only 13%–16% of solo practitioners had adopted health IT, she said. Small practices are the lifeblood of internal medicine, she said, adding that 20% of internists are in solo practices and 50% are in practices of five or fewer physicians.

Acquisition costs average $44,000 per physician and yearly upkeep amounts to about $8,500 per physician, according to a 2005 study published in Health Affairs, Dr. Kirk said. ACP advocates an add-on payment from Medicare scaled to the complexity of the technology, as well as grants, loans, or tax credits from the federal government, Dr. Kirk said.

The lack of reimbursement for using health IT is a major obstacle to adoption, said Dr. Mark Leavitt, chairman of the Certification Commission for Healthcare Information Technology, a publicly funded agency that for the last year has been vetting hardware and software systems. CCHIT has certified 57 office-based systems, he said. Some payers are now offering financial incentives to physicians who use these certified systems, Dr. Leavitt said.

Dr. Margaret Kelley, an obstetrician in a two-person practice with her father in San Antonio, said they had spent $100,000 to purchase an EMR system. Initially, the system devastated the practice's efficiency, said Dr. Kelley, who also spoke on behalf of the American College of Obstetricians and Gynecologists.

“It took our practice nearly 2 years to be able to accommodate as many patients as we could before we invested in our EMR system,” Dr. Kelley said. Even so, they would not consider returning to their old way of practice, noting that one of the biggest benefits has been access to patient charts 24 hours a day, she said.

Dr. David O. Shober said that implementing an EMR system at his two-physician family practice has been draining but beneficial. In 2004, the practice—four physicians and two offices—spent $200,000 to buy a system. Yearly costs have averaged $50,000–$60,000, said Dr. Shober, who is based in New Castle, Pa. The system has allowed the practice to create more thorough notes, standardize charts, and retrieve records easily and quickly. But the system can't communicate with radiology centers and labs, and many local pharmacies refuse to accept an e-prescription, he said.

“The only way to provide incentives for the adoption of health IT is to provide financial assistance,” said Dr. Shober, adding that the federal government should make no-interest loans available.

Dr. Kevin Napier, an internist in a nine-physician family and internal medicine practice in Griffin, Ga., said that he and his colleagues had spent $400,000 for the purchase of a system and subsequent training since 2005. There was a huge drop in patient volume and income the first year of implementation, but the benefits have outweighed the risks, Dr. Napier said.

WASHINGTON — Several individual physicians and professional organizations urged members of Congress to extend tax credits or deductions and small business loans to physicians who purchase information systems and to require Medicare to offer incentive payments to physicians who adopt electronic medical records.

Electronic medical records (EMRs) can make practices more efficient, but the initial expense—both monetary and in staff training—can be devastating to small physician offices, the witnesses told the panel members at a House Small Business Subcommittee on Regulation, Healthcare and Trade hearing.

Subcommittee chairman Charles Gonzalez (D-Tex.) agreed that the federal government should give physicians some kind of financial carrot to invest in health information technology. “Without changes in the way we promote health IT, small physician practices will be left behind the technological curve, and as a result, patients will fail to benefit from the quality of care electronic health records provide,” said Mr. Gonzalez, who recently reintroduced his National Health Information Incentive Act. The bill was aimed at assisting smaller practices but would also direct Medicare to make add-on payments for office visits facilitated by EMRs.

The American College of Physicians has called for just such a payment for several years, Dr. Lynne Kirk, ACP president, said at the hearing.

Mr. Gonzalez noted that the full Small Business Committee had recently passed the Small Business Lending Improvements Act of 2007 (H.R. 1332). The bill would let small practices borrow from the Small Business Administration to finance information systems.

Coming up with the capital for health IT is particularly tough for smaller physician groups, Dr. Kirk noted. One 2006 study showed that only 13%–16% of solo practitioners had adopted health IT, she said. Small practices are the lifeblood of internal medicine, she said, adding that 20% of internists are in solo practices and 50% are in practices of five or fewer physicians.

Acquisition costs average $44,000 per physician and yearly upkeep amounts to about $8,500 per physician, according to a 2005 study published in Health Affairs, Dr. Kirk said. ACP advocates an add-on payment from Medicare scaled to the complexity of the technology, as well as grants, loans, or tax credits from the federal government, Dr. Kirk said.

The lack of reimbursement for using health IT is a major obstacle to adoption, said Dr. Mark Leavitt, chairman of the Certification Commission for Healthcare Information Technology, a publicly funded agency that for the last year has been vetting hardware and software systems. CCHIT has certified 57 office-based systems, he said. Some payers are now offering financial incentives to physicians who use these certified systems, Dr. Leavitt said.

Dr. Margaret Kelley, an obstetrician in a two-person practice with her father in San Antonio, said they had spent $100,000 to purchase an EMR system. Initially, the system devastated the practice's efficiency, said Dr. Kelley, who also spoke on behalf of the American College of Obstetricians and Gynecologists.

“It took our practice nearly 2 years to be able to accommodate as many patients as we could before we invested in our EMR system,” Dr. Kelley said. Even so, they would not consider returning to their old way of practice, noting that one of the biggest benefits has been access to patient charts 24 hours a day, she said.

Dr. David O. Shober said that implementing an EMR system at his two-physician family practice has been draining but beneficial. In 2004, the practice—four physicians and two offices—spent $200,000 to buy a system. Yearly costs have averaged $50,000–$60,000, said Dr. Shober, who is based in New Castle, Pa. The system has allowed the practice to create more thorough notes, standardize charts, and retrieve records easily and quickly. But the system can't communicate with radiology centers and labs, and many local pharmacies refuse to accept an e-prescription, he said.

“The only way to provide incentives for the adoption of health IT is to provide financial assistance,” said Dr. Shober, adding that the federal government should make no-interest loans available.

Dr. Kevin Napier, an internist in a nine-physician family and internal medicine practice in Griffin, Ga., said that he and his colleagues had spent $400,000 for the purchase of a system and subsequent training since 2005. There was a huge drop in patient volume and income the first year of implementation, but the benefits have outweighed the risks, Dr. Napier said.

WASHINGTON — The U.S. health care delivery system should be overhauled to organize medical practice around “integrated care cycles” that are coordinated by a central physician and to reward physicians for providing value, Michael E. Porter said at a media briefing presented by the Journal of the American Medical Association.

The proposals are a shortened version of a book written by Mr. Porter, the Bishop William Lawrence University Professor at Harvard Business School, and his coauthor, Elizabeth Olmsted Teisberg of the University of Virginia's Darden Graduate School of Business.

According to Mr. Porter and Ms. Teisberg, a value-based system has three principles: providing value for patients, organizing delivery of care around conditions and care cycles, and measuring results, preferably risk-adjusted outcomes that are measured over the full cycle of care, not just an individual care episode (JAMA 2007;297:1103–11).

“Physicians focused on value for patients will no longer see themselves as self-contained, isolated actors,” the authors wrote. “Instead, they will build stronger professional connections with complementary specialists who contribute to patient care across the care cycles for their patients.”

The authors pointed out that they do not advocate a single-payer system. They say instead that competition is healthy but the current system supports the wrong kind of competition.

It rewards physicians and health plans for taking patients away from one another or for shifting costs onto a competitor, rather than for providing value for the patient in the form of improved clinical outcomes, the authors said.

Their model is similar to the medical home concept that's being promoted by the American College of Physicians and the American Academy of Family Physicians. Under the concept, physicians would provide a bundled payment to a physician to coordinate care and there would be a pay-for-performance element based on patient outcomes.

Medicare will pay for a 3-year, eight-state demonstration of the medical home, and ACP and AAFP are working with IBM on testing such a program with its employees in Austin, Tex.

Physicians are in the best position to change the delivery of health care, Mr. Porter and Ms. Teisberg said. They could lead by becoming part of a care team and agreeing to accept a piece of a payment that would be bundled for the episode of care, not for an individual service. And they can take the lead in defining outcomes measurements, Mr. Porter said at the briefing.

In the article, the authors said that pay-for-performance models are also going down the wrong track, because they are aimed only at getting physicians to comply with processes of care. That will not provide value to the patient and will likely lead to micromanagement of medical practice, they said.

A study published the same week in the New England Journal of Medicine found that pay-for-performance proposals under Medicare aren't likely to work well under the current system, because patients' care is not being coordinated by a single provider. In fact, beneficiaries are seeing multiple physicians—typically seven physicians in four practices in a given year—which “impedes the ability of any one assigned provider to influence the overall quality of care for a given patient,” wrote the investigators, who were with the Center for Studying Health System Change and Memorial Sloan-Kettering Cancer Center (N. Engl. J. Med. 2007;356:1130–9).

Mr. Porter and Ms. Teisberg envision a future where care is delivered efficiently by physicians allied in partnerships or working for large group practices or staff-model managed care organizations.

WASHINGTON — The U.S. health care delivery system should be overhauled to organize medical practice around “integrated care cycles” that are coordinated by a central physician and to reward physicians for providing value, Michael E. Porter said at a media briefing presented by the Journal of the American Medical Association.

The proposals are a shortened version of a book written by Mr. Porter, the Bishop William Lawrence University Professor at Harvard Business School, and his coauthor, Elizabeth Olmsted Teisberg of the University of Virginia's Darden Graduate School of Business.

According to Mr. Porter and Ms. Teisberg, a value-based system has three principles: providing value for patients, organizing delivery of care around conditions and care cycles, and measuring results, preferably risk-adjusted outcomes that are measured over the full cycle of care, not just an individual care episode (JAMA 2007;297:1103–11).

“Physicians focused on value for patients will no longer see themselves as self-contained, isolated actors,” the authors wrote. “Instead, they will build stronger professional connections with complementary specialists who contribute to patient care across the care cycles for their patients.”

The authors pointed out that they do not advocate a single-payer system. They say instead that competition is healthy but the current system supports the wrong kind of competition.

It rewards physicians and health plans for taking patients away from one another or for shifting costs onto a competitor, rather than for providing value for the patient in the form of improved clinical outcomes, the authors said.

Their model is similar to the medical home concept that's being promoted by the American College of Physicians and the American Academy of Family Physicians. Under the concept, physicians would provide a bundled payment to a physician to coordinate care and there would be a pay-for-performance element based on patient outcomes.

Medicare will pay for a 3-year, eight-state demonstration of the medical home, and ACP and AAFP are working with IBM on testing such a program with its employees in Austin, Tex.

Physicians are in the best position to change the delivery of health care, Mr. Porter and Ms. Teisberg said. They could lead by becoming part of a care team and agreeing to accept a piece of a payment that would be bundled for the episode of care, not for an individual service. And they can take the lead in defining outcomes measurements, Mr. Porter said at the briefing.

In the article, the authors said that pay-for-performance models are also going down the wrong track, because they are aimed only at getting physicians to comply with processes of care. That will not provide value to the patient and will likely lead to micromanagement of medical practice, they said.

A study published the same week in the New England Journal of Medicine found that pay-for-performance proposals under Medicare aren't likely to work well under the current system, because patients' care is not being coordinated by a single provider. In fact, beneficiaries are seeing multiple physicians—typically seven physicians in four practices in a given year—which “impedes the ability of any one assigned provider to influence the overall quality of care for a given patient,” wrote the investigators, who were with the Center for Studying Health System Change and Memorial Sloan-Kettering Cancer Center (N. Engl. J. Med. 2007;356:1130–9).

Mr. Porter and Ms. Teisberg envision a future where care is delivered efficiently by physicians allied in partnerships or working for large group practices or staff-model managed care organizations.

WASHINGTON — The U.S. health care delivery system should be overhauled to organize medical practice around “integrated care cycles” that are coordinated by a central physician and to reward physicians for providing value, Michael E. Porter said at a media briefing presented by the Journal of the American Medical Association.

The proposals are a shortened version of a book written by Mr. Porter, the Bishop William Lawrence University Professor at Harvard Business School, and his coauthor, Elizabeth Olmsted Teisberg of the University of Virginia's Darden Graduate School of Business.

According to Mr. Porter and Ms. Teisberg, a value-based system has three principles: providing value for patients, organizing delivery of care around conditions and care cycles, and measuring results, preferably risk-adjusted outcomes that are measured over the full cycle of care, not just an individual care episode (JAMA 2007;297:1103–11).

“Physicians focused on value for patients will no longer see themselves as self-contained, isolated actors,” the authors wrote. “Instead, they will build stronger professional connections with complementary specialists who contribute to patient care across the care cycles for their patients.”

The authors pointed out that they do not advocate a single-payer system. They say instead that competition is healthy but the current system supports the wrong kind of competition.

It rewards physicians and health plans for taking patients away from one another or for shifting costs onto a competitor, rather than for providing value for the patient in the form of improved clinical outcomes, the authors said.

Their model is similar to the medical home concept that's being promoted by the American College of Physicians and the American Academy of Family Physicians. Under the concept, physicians would provide a bundled payment to a physician to coordinate care and there would be a pay-for-performance element based on patient outcomes.

Medicare will pay for a 3-year, eight-state demonstration of the medical home, and ACP and AAFP are working with IBM on testing such a program with its employees in Austin, Tex.

Physicians are in the best position to change the delivery of health care, Mr. Porter and Ms. Teisberg said. They could lead by becoming part of a care team and agreeing to accept a piece of a payment that would be bundled for the episode of care, not for an individual service. And they can take the lead in defining outcomes measurements, Mr. Porter said at the briefing.

In the article, the authors said that pay-for-performance models are also going down the wrong track, because they are aimed only at getting physicians to comply with processes of care. That will not provide value to the patient and will likely lead to micromanagement of medical practice, they said.

A study published the same week in the New England Journal of Medicine found that pay-for-performance proposals under Medicare aren't likely to work well under the current system, because patients' care is not being coordinated by a single provider. In fact, beneficiaries are seeing multiple physicians—typically seven physicians in four practices in a given year—which “impedes the ability of any one assigned provider to influence the overall quality of care for a given patient,” wrote the investigators, who were with the Center for Studying Health System Change and Memorial Sloan-Kettering Cancer Center (N. Engl. J. Med. 2007;356:1130–9).

Mr. Porter and Ms. Teisberg envision a future where care is delivered efficiently by physicians allied in partnerships or working for large group practices or staff-model managed care organizations.

Several large employers and employer coalitions are finding that it may be a worthwhile gamble to reduce or eliminate copayments for medications that control diabetes or treat comorbid conditions.

Pitney Bowes, for instance, reduced copays for diabetes drugs, as well as for asthma drugs, in 2001. The company realized first-year savings of about $1 million, according to an article published online in Health Affairs.

Diabetes is a fat target. Some 20 million Americans have the condition, leading to $132 billion in medical costs, disability, and lost productivity, according to the University of Michigan, one of the employers that recently launched a reduced-copay program. However, only about half of diabetes patients stick to their prescribed medication regimens, which can include as many as a dozen therapies. Out-of-pocket costs for those medications add up, which may deter patients from adhering to their treatment plans, according to the university.

These reduced copay programs are in stark contrast to a trend toward shifting costs onto workers. Copays for pharmaceuticals in particular have grown in the last decade. Making consumers shoulder more of the cost has helped bring down prescription drug spending from double-digit growth rates.

But higher copays can backfire. “When cost sharing is too large in relation to a consumer's resources, the result is either serious financial strain or reduced access to care,” according to an analysis issued by the Center for Studying Health System Change. The authors also found that these benefit structures “do not distinguish between services that are considered extremely important, such as testing, insulin, and physician visits to manage diabetes, and services that are more elective, such as knee surgery to play recreational sports.”

It seems counterproductive to erect hurdles that might prevent patients from accessing proven effective therapies for diabetes, Dr. William Herman said in an interview. Dr. Herman is medical director of M-Care, an HMO participating in the University of Michigan's 2-year pilot program for employees that aims to determine if reducing the cost of diabetes drugs will encourage more patients to stick to their treatment regimens and also cut overall health costs.

“If these copayments are interfering with desired processes of care and adversely affecting health outcomes, then this is not something we want in our benefit design,” Dr. Herman said.

Employees began enrolling in the Michigan program in July 2006. If they already were receiving an oral antidiabetic agent or insulin, they were automatically signed up. About 2,100 of those covered by university health plans are participating, out of a total worker and dependent population of 60,000, he said.

Under the program, enrollees pay nothing for generics (compared with $7 normally), $7 for preferred brands (instead of $14), and $18 for nonpreferred brands (instead of $24). These copays also apply to other drugs taken by diabetes patients, including β-blockers, calcium channel blockers, lipid-lowering agents, antihypertensives, and antidepressants.

University workers belong to a variety of health plans, but they all receive their prescriptions through a single pharmacy benefit manager, allowing for easier tracking of medication uptake and compliance, Dr. Herman said. Through its HMO, the university also will be able to compare medication compliance and health outcomes between diabetic workers and diabetes patients who aren't employees, he said.

So far, the program is costing the university about $30,000 a month, Dr. Herman said. That's how much patients are not spending.

There are no data yet on changes in hemoglobin A_1c levels, lipid levels, or medication uptake. If there are positive changes, the university is likely to stick with the reduced and waived copays, he said. The school also has looked at making similar reductions for other chronic diseases.

The Michigan program is unique in that patients do not have to enroll in a disease management program. Other employers have coupled reduced or waived copays with coaching from pharmacists.

That model was pioneered by employers in Asheville, N.C., and the North Carolina Center for Pharmaceutical Care. The program began in 1997 with 47 employer-participants. By 2003, those employers were reporting improved HbA_1c levels, a 50% reduction in average annual sick leave, and overall medical costs 58% below the expected level (J. Am. Pharm. Assoc. Wash. 2003;43:173–84). Employers saved $1,600–$3,300 per worker because of fewer emergency department visits and fewer diabetes-related hospitalizations, according to the American Pharmacists Association Foundation.

Soon after those results were published, the APhA Foundation, with financial backing from GlaxoSmithKline, created an initiative patterned after the Asheville Project. Thirty employers in 10 cities are now participating. It is a voluntary program, but once in, patients have to agree to meet with an assigned pharmacist—about 4–7 times yearly—for education and training, and to show they are working toward certain goals such as getting annual eye and foot exams, Bill Ellis, executive director and CEO of the APhA Foundation, said in an interview. In return, the cost of diabetes medication is reduced or eliminated, he said. On average, patients save $400 a year. Although employers are in many cases contributing a significant amount of money up front, they are willing to, Mr. Ellis said.

“They're making an investment in keeping people well,” he said.

The employers and the APhA Foundation are tracking clinical and economic outcomes and will eventually report those, along with patient satisfaction scores.

Several large employers and employer coalitions are finding that it may be a worthwhile gamble to reduce or eliminate copayments for medications that control diabetes or treat comorbid conditions.

Pitney Bowes, for instance, reduced copays for diabetes drugs, as well as for asthma drugs, in 2001. The company realized first-year savings of about $1 million, according to an article published online in Health Affairs.

Diabetes is a fat target. Some 20 million Americans have the condition, leading to $132 billion in medical costs, disability, and lost productivity, according to the University of Michigan, one of the employers that recently launched a reduced-copay program. However, only about half of diabetes patients stick to their prescribed medication regimens, which can include as many as a dozen therapies. Out-of-pocket costs for those medications add up, which may deter patients from adhering to their treatment plans, according to the university.

These reduced copay programs are in stark contrast to a trend toward shifting costs onto workers. Copays for pharmaceuticals in particular have grown in the last decade. Making consumers shoulder more of the cost has helped bring down prescription drug spending from double-digit growth rates.

But higher copays can backfire. “When cost sharing is too large in relation to a consumer's resources, the result is either serious financial strain or reduced access to care,” according to an analysis issued by the Center for Studying Health System Change. The authors also found that these benefit structures “do not distinguish between services that are considered extremely important, such as testing, insulin, and physician visits to manage diabetes, and services that are more elective, such as knee surgery to play recreational sports.”

It seems counterproductive to erect hurdles that might prevent patients from accessing proven effective therapies for diabetes, Dr. William Herman said in an interview. Dr. Herman is medical director of M-Care, an HMO participating in the University of Michigan's 2-year pilot program for employees that aims to determine if reducing the cost of diabetes drugs will encourage more patients to stick to their treatment regimens and also cut overall health costs.

“If these copayments are interfering with desired processes of care and adversely affecting health outcomes, then this is not something we want in our benefit design,” Dr. Herman said.

Employees began enrolling in the Michigan program in July 2006. If they already were receiving an oral antidiabetic agent or insulin, they were automatically signed up. About 2,100 of those covered by university health plans are participating, out of a total worker and dependent population of 60,000, he said.

Under the program, enrollees pay nothing for generics (compared with $7 normally), $7 for preferred brands (instead of $14), and $18 for nonpreferred brands (instead of $24). These copays also apply to other drugs taken by diabetes patients, including β-blockers, calcium channel blockers, lipid-lowering agents, antihypertensives, and antidepressants.

University workers belong to a variety of health plans, but they all receive their prescriptions through a single pharmacy benefit manager, allowing for easier tracking of medication uptake and compliance, Dr. Herman said. Through its HMO, the university also will be able to compare medication compliance and health outcomes between diabetic workers and diabetes patients who aren't employees, he said.

So far, the program is costing the university about $30,000 a month, Dr. Herman said. That's how much patients are not spending.

There are no data yet on changes in hemoglobin A_1c levels, lipid levels, or medication uptake. If there are positive changes, the university is likely to stick with the reduced and waived copays, he said. The school also has looked at making similar reductions for other chronic diseases.

The Michigan program is unique in that patients do not have to enroll in a disease management program. Other employers have coupled reduced or waived copays with coaching from pharmacists.

That model was pioneered by employers in Asheville, N.C., and the North Carolina Center for Pharmaceutical Care. The program began in 1997 with 47 employer-participants. By 2003, those employers were reporting improved HbA_1c levels, a 50% reduction in average annual sick leave, and overall medical costs 58% below the expected level (J. Am. Pharm. Assoc. Wash. 2003;43:173–84). Employers saved $1,600–$3,300 per worker because of fewer emergency department visits and fewer diabetes-related hospitalizations, according to the American Pharmacists Association Foundation.

Soon after those results were published, the APhA Foundation, with financial backing from GlaxoSmithKline, created an initiative patterned after the Asheville Project. Thirty employers in 10 cities are now participating. It is a voluntary program, but once in, patients have to agree to meet with an assigned pharmacist—about 4–7 times yearly—for education and training, and to show they are working toward certain goals such as getting annual eye and foot exams, Bill Ellis, executive director and CEO of the APhA Foundation, said in an interview. In return, the cost of diabetes medication is reduced or eliminated, he said. On average, patients save $400 a year. Although employers are in many cases contributing a significant amount of money up front, they are willing to, Mr. Ellis said.

“They're making an investment in keeping people well,” he said.

The employers and the APhA Foundation are tracking clinical and economic outcomes and will eventually report those, along with patient satisfaction scores.

Several large employers and employer coalitions are finding that it may be a worthwhile gamble to reduce or eliminate copayments for medications that control diabetes or treat comorbid conditions.

Pitney Bowes, for instance, reduced copays for diabetes drugs, as well as for asthma drugs, in 2001. The company realized first-year savings of about $1 million, according to an article published online in Health Affairs.

Diabetes is a fat target. Some 20 million Americans have the condition, leading to $132 billion in medical costs, disability, and lost productivity, according to the University of Michigan, one of the employers that recently launched a reduced-copay program. However, only about half of diabetes patients stick to their prescribed medication regimens, which can include as many as a dozen therapies. Out-of-pocket costs for those medications add up, which may deter patients from adhering to their treatment plans, according to the university.

These reduced copay programs are in stark contrast to a trend toward shifting costs onto workers. Copays for pharmaceuticals in particular have grown in the last decade. Making consumers shoulder more of the cost has helped bring down prescription drug spending from double-digit growth rates.

But higher copays can backfire. “When cost sharing is too large in relation to a consumer's resources, the result is either serious financial strain or reduced access to care,” according to an analysis issued by the Center for Studying Health System Change. The authors also found that these benefit structures “do not distinguish between services that are considered extremely important, such as testing, insulin, and physician visits to manage diabetes, and services that are more elective, such as knee surgery to play recreational sports.”

It seems counterproductive to erect hurdles that might prevent patients from accessing proven effective therapies for diabetes, Dr. William Herman said in an interview. Dr. Herman is medical director of M-Care, an HMO participating in the University of Michigan's 2-year pilot program for employees that aims to determine if reducing the cost of diabetes drugs will encourage more patients to stick to their treatment regimens and also cut overall health costs.

“If these copayments are interfering with desired processes of care and adversely affecting health outcomes, then this is not something we want in our benefit design,” Dr. Herman said.

Employees began enrolling in the Michigan program in July 2006. If they already were receiving an oral antidiabetic agent or insulin, they were automatically signed up. About 2,100 of those covered by university health plans are participating, out of a total worker and dependent population of 60,000, he said.

Under the program, enrollees pay nothing for generics (compared with $7 normally), $7 for preferred brands (instead of $14), and $18 for nonpreferred brands (instead of $24). These copays also apply to other drugs taken by diabetes patients, including β-blockers, calcium channel blockers, lipid-lowering agents, antihypertensives, and antidepressants.

University workers belong to a variety of health plans, but they all receive their prescriptions through a single pharmacy benefit manager, allowing for easier tracking of medication uptake and compliance, Dr. Herman said. Through its HMO, the university also will be able to compare medication compliance and health outcomes between diabetic workers and diabetes patients who aren't employees, he said.

So far, the program is costing the university about $30,000 a month, Dr. Herman said. That's how much patients are not spending.

There are no data yet on changes in hemoglobin A_1c levels, lipid levels, or medication uptake. If there are positive changes, the university is likely to stick with the reduced and waived copays, he said. The school also has looked at making similar reductions for other chronic diseases.

The Michigan program is unique in that patients do not have to enroll in a disease management program. Other employers have coupled reduced or waived copays with coaching from pharmacists.

That model was pioneered by employers in Asheville, N.C., and the North Carolina Center for Pharmaceutical Care. The program began in 1997 with 47 employer-participants. By 2003, those employers were reporting improved HbA_1c levels, a 50% reduction in average annual sick leave, and overall medical costs 58% below the expected level (J. Am. Pharm. Assoc. Wash. 2003;43:173–84). Employers saved $1,600–$3,300 per worker because of fewer emergency department visits and fewer diabetes-related hospitalizations, according to the American Pharmacists Association Foundation.

Soon after those results were published, the APhA Foundation, with financial backing from GlaxoSmithKline, created an initiative patterned after the Asheville Project. Thirty employers in 10 cities are now participating. It is a voluntary program, but once in, patients have to agree to meet with an assigned pharmacist—about 4–7 times yearly—for education and training, and to show they are working toward certain goals such as getting annual eye and foot exams, Bill Ellis, executive director and CEO of the APhA Foundation, said in an interview. In return, the cost of diabetes medication is reduced or eliminated, he said. On average, patients save $400 a year. Although employers are in many cases contributing a significant amount of money up front, they are willing to, Mr. Ellis said.

“They're making an investment in keeping people well,” he said.

The employers and the APhA Foundation are tracking clinical and economic outcomes and will eventually report those, along with patient satisfaction scores.