Mary Ellen Schneider

WASHINGTON — Specialty hospitals admit fewer Medicaid patients than community hospitals, according to a preliminary analysis conducted by the Medicare Payment Advisory Commission.

Physician-owned heart hospitals, for example, accounted for about 4% of Medicaid discharges, compared with about 1% for orthopedic hospitals and about 15% for community hospitals, according to data from the commission (MedPAC).

On the other hand, heart hospitals account for about 62% of Medicare discharges, compared with half that amount for orthopedic hospitals and community hospitals.

The analysis is part of a MedPAC study on physician-owned heart, orthopedic, and surgical specialty hospitals, which was mandated by last year's Medicare Modernization Act. The report is due to Congress in March 2005.

The mix of payers may differ at physician-owned specialty hospitals for a number of reasons, said MedPAC analyst Jeffrey Stensland, Ph.D. For example, emergency room availability may mean that specialty hospitals see fewer indigent patients, or physicians may refer more profitable patients to their specialty hospitals.

In addition, the types of services offered or the location of the specialty hospital can influence the types of patients seen. And the mix of patients may also be affected if community hospitals freeze out specialty hospitals from private payer insurance contracts, Dr. Stensland said.

Physicians interviewed during MedPAC staff site visits said they set up specialty hospitals mainly because of dissatisfaction with hospital governance, said MedPAC analyst Carol Carter. “Many physicians said they tried to work with the community hospitals but that decision-making took too long and did not support their practices.”

The site visits also raised the issue of whether specialty hospitals engaged in patient selection or made improper transfers. “Specialty hospitals uniformly denied selecting cases based on payer mix but the specialty hospitals we visited had much lower Medicaid shares and provided less uncompensated care,” Ms. Carter said.

Officials working in community hospitals also complained about some transfer practices, she said. They said that in some cases patients are stabilized at their facilities and then transferred to specialty hospitals for procedures. In other cases, complex patients who are not doing well at specialty hospitals are transferred to community hospitals, they reported.

But MedPAC also heard reports that community hospitals have taken some retaliatory actions against specialty hospitals, Ms. Carter said. For example, one community hospital had barred their physicians from investing in specialty hospitals and some are including non-compete clauses in physician contracts.

WASHINGTON — Specialty hospitals admit fewer Medicaid patients than community hospitals, according to a preliminary analysis conducted by the Medicare Payment Advisory Commission.

Physician-owned heart hospitals, for example, accounted for about 4% of Medicaid discharges, compared with about 1% for orthopedic hospitals and about 15% for community hospitals, according to data from the commission (MedPAC).

On the other hand, heart hospitals account for about 62% of Medicare discharges, compared with half that amount for orthopedic hospitals and community hospitals.

The analysis is part of a MedPAC study on physician-owned heart, orthopedic, and surgical specialty hospitals, which was mandated by last year's Medicare Modernization Act. The report is due to Congress in March 2005.

The mix of payers may differ at physician-owned specialty hospitals for a number of reasons, said MedPAC analyst Jeffrey Stensland, Ph.D. For example, emergency room availability may mean that specialty hospitals see fewer indigent patients, or physicians may refer more profitable patients to their specialty hospitals.

In addition, the types of services offered or the location of the specialty hospital can influence the types of patients seen. And the mix of patients may also be affected if community hospitals freeze out specialty hospitals from private payer insurance contracts, Dr. Stensland said.

Physicians interviewed during MedPAC staff site visits said they set up specialty hospitals mainly because of dissatisfaction with hospital governance, said MedPAC analyst Carol Carter. “Many physicians said they tried to work with the community hospitals but that decision-making took too long and did not support their practices.”

The site visits also raised the issue of whether specialty hospitals engaged in patient selection or made improper transfers. “Specialty hospitals uniformly denied selecting cases based on payer mix but the specialty hospitals we visited had much lower Medicaid shares and provided less uncompensated care,” Ms. Carter said.

Officials working in community hospitals also complained about some transfer practices, she said. They said that in some cases patients are stabilized at their facilities and then transferred to specialty hospitals for procedures. In other cases, complex patients who are not doing well at specialty hospitals are transferred to community hospitals, they reported.

But MedPAC also heard reports that community hospitals have taken some retaliatory actions against specialty hospitals, Ms. Carter said. For example, one community hospital had barred their physicians from investing in specialty hospitals and some are including non-compete clauses in physician contracts.

WASHINGTON — Specialty hospitals admit fewer Medicaid patients than community hospitals, according to a preliminary analysis conducted by the Medicare Payment Advisory Commission.

Physician-owned heart hospitals, for example, accounted for about 4% of Medicaid discharges, compared with about 1% for orthopedic hospitals and about 15% for community hospitals, according to data from the commission (MedPAC).

On the other hand, heart hospitals account for about 62% of Medicare discharges, compared with half that amount for orthopedic hospitals and community hospitals.

The analysis is part of a MedPAC study on physician-owned heart, orthopedic, and surgical specialty hospitals, which was mandated by last year's Medicare Modernization Act. The report is due to Congress in March 2005.

The mix of payers may differ at physician-owned specialty hospitals for a number of reasons, said MedPAC analyst Jeffrey Stensland, Ph.D. For example, emergency room availability may mean that specialty hospitals see fewer indigent patients, or physicians may refer more profitable patients to their specialty hospitals.

In addition, the types of services offered or the location of the specialty hospital can influence the types of patients seen. And the mix of patients may also be affected if community hospitals freeze out specialty hospitals from private payer insurance contracts, Dr. Stensland said.

Physicians interviewed during MedPAC staff site visits said they set up specialty hospitals mainly because of dissatisfaction with hospital governance, said MedPAC analyst Carol Carter. “Many physicians said they tried to work with the community hospitals but that decision-making took too long and did not support their practices.”

The site visits also raised the issue of whether specialty hospitals engaged in patient selection or made improper transfers. “Specialty hospitals uniformly denied selecting cases based on payer mix but the specialty hospitals we visited had much lower Medicaid shares and provided less uncompensated care,” Ms. Carter said.

Officials working in community hospitals also complained about some transfer practices, she said. They said that in some cases patients are stabilized at their facilities and then transferred to specialty hospitals for procedures. In other cases, complex patients who are not doing well at specialty hospitals are transferred to community hospitals, they reported.

But MedPAC also heard reports that community hospitals have taken some retaliatory actions against specialty hospitals, Ms. Carter said. For example, one community hospital had barred their physicians from investing in specialty hospitals and some are including non-compete clauses in physician contracts.

ALEXANDRIA, VA. — Traditional tort reform measures like damage caps won't address some of the fundamental problems with the medical liability system, experts said at a meeting on patient safety and medical liability sponsored by the Joint Commission on Accreditation of Healthcare Organizations.

To deal with the current malpractice situation, the medical community needs to address the reasons why people sue—injuries, unmet expenses, and anger, said Lucian L. Leape, M.D., of the department of health policy and management at the Harvard School of Public Health, Boston.

“The main reason most people sue is because they are angry at the physician,” Dr. Leape said. But the current system and the most commonly proposed reforms, such as damage caps, don't address the need to increase disclosure of errors to patients or incentivize physicians to offer apologies.

In the current tort system, filing a lawsuit is often the only way that patients feel they can get information about what happened to them or impose a penalty on the physician, said Michelle Mello, Ph.D., also of the department of health policy and management at the Harvard School of Public Health. But this process often fails to secure an admission of responsibility or an apology, she said.

Traditional reforms such as caps would undercompensate seriously injured patients and increase administrative costs, Dr. Mello said. But they would not help deter medical malpractice, she said.

Damage caps also fail to address the poor correlation between medical injury and malpractice claims, she said. Instead of focusing on caps, the medical community needs to consider an administrative compensation system to replace torts.

The malpractice system is “blocking efforts at patient safety,” said Troyen A. Brennan, M.D., professor of medicine at Harvard Medical School, Boston, and professor of law and public health at the Harvard School of Public Health.

A new system should separate compensation for injuries from deterrence, he said. To do that, liability for negligence has to be eliminated, and reporting has to be made based on patient injury.

Physicians have to realize that reporting patient injury is part of their professional responsibility. Currently, some physicians do not disclose errors or injuries. It's a rational economic response to their rising premiums and fear of being sued, he said, but it's not an ethical response.

ALEXANDRIA, VA. — Traditional tort reform measures like damage caps won't address some of the fundamental problems with the medical liability system, experts said at a meeting on patient safety and medical liability sponsored by the Joint Commission on Accreditation of Healthcare Organizations.

To deal with the current malpractice situation, the medical community needs to address the reasons why people sue—injuries, unmet expenses, and anger, said Lucian L. Leape, M.D., of the department of health policy and management at the Harvard School of Public Health, Boston.

“The main reason most people sue is because they are angry at the physician,” Dr. Leape said. But the current system and the most commonly proposed reforms, such as damage caps, don't address the need to increase disclosure of errors to patients or incentivize physicians to offer apologies.

In the current tort system, filing a lawsuit is often the only way that patients feel they can get information about what happened to them or impose a penalty on the physician, said Michelle Mello, Ph.D., also of the department of health policy and management at the Harvard School of Public Health. But this process often fails to secure an admission of responsibility or an apology, she said.

Traditional reforms such as caps would undercompensate seriously injured patients and increase administrative costs, Dr. Mello said. But they would not help deter medical malpractice, she said.

Damage caps also fail to address the poor correlation between medical injury and malpractice claims, she said. Instead of focusing on caps, the medical community needs to consider an administrative compensation system to replace torts.

The malpractice system is “blocking efforts at patient safety,” said Troyen A. Brennan, M.D., professor of medicine at Harvard Medical School, Boston, and professor of law and public health at the Harvard School of Public Health.

A new system should separate compensation for injuries from deterrence, he said. To do that, liability for negligence has to be eliminated, and reporting has to be made based on patient injury.

Physicians have to realize that reporting patient injury is part of their professional responsibility. Currently, some physicians do not disclose errors or injuries. It's a rational economic response to their rising premiums and fear of being sued, he said, but it's not an ethical response.

ALEXANDRIA, VA. — Traditional tort reform measures like damage caps won't address some of the fundamental problems with the medical liability system, experts said at a meeting on patient safety and medical liability sponsored by the Joint Commission on Accreditation of Healthcare Organizations.

To deal with the current malpractice situation, the medical community needs to address the reasons why people sue—injuries, unmet expenses, and anger, said Lucian L. Leape, M.D., of the department of health policy and management at the Harvard School of Public Health, Boston.

“The main reason most people sue is because they are angry at the physician,” Dr. Leape said. But the current system and the most commonly proposed reforms, such as damage caps, don't address the need to increase disclosure of errors to patients or incentivize physicians to offer apologies.

In the current tort system, filing a lawsuit is often the only way that patients feel they can get information about what happened to them or impose a penalty on the physician, said Michelle Mello, Ph.D., also of the department of health policy and management at the Harvard School of Public Health. But this process often fails to secure an admission of responsibility or an apology, she said.

Traditional reforms such as caps would undercompensate seriously injured patients and increase administrative costs, Dr. Mello said. But they would not help deter medical malpractice, she said.

Damage caps also fail to address the poor correlation between medical injury and malpractice claims, she said. Instead of focusing on caps, the medical community needs to consider an administrative compensation system to replace torts.

The malpractice system is “blocking efforts at patient safety,” said Troyen A. Brennan, M.D., professor of medicine at Harvard Medical School, Boston, and professor of law and public health at the Harvard School of Public Health.

A new system should separate compensation for injuries from deterrence, he said. To do that, liability for negligence has to be eliminated, and reporting has to be made based on patient injury.

Physicians have to realize that reporting patient injury is part of their professional responsibility. Currently, some physicians do not disclose errors or injuries. It's a rational economic response to their rising premiums and fear of being sued, he said, but it's not an ethical response.

ALEXANDRIA, VA. — In New Zealand, all physicians pay $700 a year for indemnity insurance, and it's nearly impossible to sue a physician.

That's because New Zealand has had a no-fault injury compensation system in place for the last 30 years.

The Accident Compensation Corporation (ACC), a state-funded insurer established in 1974, addresses unmet patient expenses from injuries. And since 1994, New Zealand's Health and Disability Commissioner has handled complaint resolution and provider accountability.

“We've made a really good start,” Marie Bismark, M.B., a legal advisor to the New Zealand health and disability commissioner, said at a meeting on patient safety and medical liability sponsored by the Joint Commission on Accreditation of Healthcare Organizations.

Compensation is available to patients for medical errors that result from a failure to observe a reasonable standard of care. The ACC also provides compensation for medical mishaps that are defined as rare and severe adverse outcomes of appropriate treatment.

Dr. Bismark gave an example of how the system works: A 22-year-old woman with a history of pelvic pain underwent laparoscopy to confirm the diagnosis of endometriosis. During the surgery, her bowel was perforated, which lead to peritonitis. The woman required further surgery to remove the perforated section of her bowel and form a temporary colostomy. She spent 3 weeks in critical care recovering.

New Zealand's Accident Compensation Corporation accepted the woman's claim as a medical mishap and she was awarded $28,000 to cover treatment costs, pharmaceuticals, transportation, home help, and lost earnings.

In a situation where a person can no longer perform his or her job, the government will pay for retraining in a new career. And in cases of permanent disability, patients can receive a lump sum payment of up to $70,000.

The no-fault system also has an accountability component. In 1994, the government established a code of patients' rights and designated the health and disability commissioner as the independent health ombudsman to enforce those rights.

Patient complaints are often handled through advocacy or mediation. During the advocacy process, an independent patient advocate works to resolve the complaint directly with the provider.

In the case of mediation, a neutral third party assists the patient, the physician, and a representative of the hospital to come to a formal agreement.

Formal investigations are generally reserved for serious complaints, she said.

Few complaints proceed to a disciplinary hearing. In a typical year, they receive about 531 complaints, which lead to about 151 investigations and 10 disciplinary hearings.

So far, the experience with the no-fault system has shown that patients typically aren't seeking to punish physicians, Dr. Bismark said. Instead, they want to see systemic changes that will keep mistakes from happening again.

But a downside of the system is that there are many adverse events that ACC officials never hear about, Dr. Bismark said.

And complaints can still have toxic effects on the relationship between patients and physicians when they are not handled with care.

“This system is not neutral for doctors,” she said.

Dr. Bismark pointed out that her country's system isn't necessarily a model for countries like the United States because of the differences in size and the structure of the health care system. New Zealand is a country of 4 million people, and its per capita health care costs are about $1,857, compared with $5,267 in the United States, she said. And New Zealand's no-fault system exists in the context of universal state-funded health care coverage.

ALEXANDRIA, VA. — In New Zealand, all physicians pay $700 a year for indemnity insurance, and it's nearly impossible to sue a physician.

That's because New Zealand has had a no-fault injury compensation system in place for the last 30 years.

The Accident Compensation Corporation (ACC), a state-funded insurer established in 1974, addresses unmet patient expenses from injuries. And since 1994, New Zealand's Health and Disability Commissioner has handled complaint resolution and provider accountability.

“We've made a really good start,” Marie Bismark, M.B., a legal advisor to the New Zealand health and disability commissioner, said at a meeting on patient safety and medical liability sponsored by the Joint Commission on Accreditation of Healthcare Organizations.

Compensation is available to patients for medical errors that result from a failure to observe a reasonable standard of care. The ACC also provides compensation for medical mishaps that are defined as rare and severe adverse outcomes of appropriate treatment.

Dr. Bismark gave an example of how the system works: A 22-year-old woman with a history of pelvic pain underwent laparoscopy to confirm the diagnosis of endometriosis. During the surgery, her bowel was perforated, which lead to peritonitis. The woman required further surgery to remove the perforated section of her bowel and form a temporary colostomy. She spent 3 weeks in critical care recovering.

New Zealand's Accident Compensation Corporation accepted the woman's claim as a medical mishap and she was awarded $28,000 to cover treatment costs, pharmaceuticals, transportation, home help, and lost earnings.

In a situation where a person can no longer perform his or her job, the government will pay for retraining in a new career. And in cases of permanent disability, patients can receive a lump sum payment of up to $70,000.

The no-fault system also has an accountability component. In 1994, the government established a code of patients' rights and designated the health and disability commissioner as the independent health ombudsman to enforce those rights.

Patient complaints are often handled through advocacy or mediation. During the advocacy process, an independent patient advocate works to resolve the complaint directly with the provider.

In the case of mediation, a neutral third party assists the patient, the physician, and a representative of the hospital to come to a formal agreement.

Formal investigations are generally reserved for serious complaints, she said.

Few complaints proceed to a disciplinary hearing. In a typical year, they receive about 531 complaints, which lead to about 151 investigations and 10 disciplinary hearings.

So far, the experience with the no-fault system has shown that patients typically aren't seeking to punish physicians, Dr. Bismark said. Instead, they want to see systemic changes that will keep mistakes from happening again.

But a downside of the system is that there are many adverse events that ACC officials never hear about, Dr. Bismark said.

And complaints can still have toxic effects on the relationship between patients and physicians when they are not handled with care.

“This system is not neutral for doctors,” she said.

Dr. Bismark pointed out that her country's system isn't necessarily a model for countries like the United States because of the differences in size and the structure of the health care system. New Zealand is a country of 4 million people, and its per capita health care costs are about $1,857, compared with $5,267 in the United States, she said. And New Zealand's no-fault system exists in the context of universal state-funded health care coverage.

ALEXANDRIA, VA. — In New Zealand, all physicians pay $700 a year for indemnity insurance, and it's nearly impossible to sue a physician.

That's because New Zealand has had a no-fault injury compensation system in place for the last 30 years.

The Accident Compensation Corporation (ACC), a state-funded insurer established in 1974, addresses unmet patient expenses from injuries. And since 1994, New Zealand's Health and Disability Commissioner has handled complaint resolution and provider accountability.

“We've made a really good start,” Marie Bismark, M.B., a legal advisor to the New Zealand health and disability commissioner, said at a meeting on patient safety and medical liability sponsored by the Joint Commission on Accreditation of Healthcare Organizations.

Compensation is available to patients for medical errors that result from a failure to observe a reasonable standard of care. The ACC also provides compensation for medical mishaps that are defined as rare and severe adverse outcomes of appropriate treatment.

Dr. Bismark gave an example of how the system works: A 22-year-old woman with a history of pelvic pain underwent laparoscopy to confirm the diagnosis of endometriosis. During the surgery, her bowel was perforated, which lead to peritonitis. The woman required further surgery to remove the perforated section of her bowel and form a temporary colostomy. She spent 3 weeks in critical care recovering.

New Zealand's Accident Compensation Corporation accepted the woman's claim as a medical mishap and she was awarded $28,000 to cover treatment costs, pharmaceuticals, transportation, home help, and lost earnings.

In a situation where a person can no longer perform his or her job, the government will pay for retraining in a new career. And in cases of permanent disability, patients can receive a lump sum payment of up to $70,000.

The no-fault system also has an accountability component. In 1994, the government established a code of patients' rights and designated the health and disability commissioner as the independent health ombudsman to enforce those rights.

Patient complaints are often handled through advocacy or mediation. During the advocacy process, an independent patient advocate works to resolve the complaint directly with the provider.

In the case of mediation, a neutral third party assists the patient, the physician, and a representative of the hospital to come to a formal agreement.

Formal investigations are generally reserved for serious complaints, she said.

Few complaints proceed to a disciplinary hearing. In a typical year, they receive about 531 complaints, which lead to about 151 investigations and 10 disciplinary hearings.

So far, the experience with the no-fault system has shown that patients typically aren't seeking to punish physicians, Dr. Bismark said. Instead, they want to see systemic changes that will keep mistakes from happening again.

But a downside of the system is that there are many adverse events that ACC officials never hear about, Dr. Bismark said.

And complaints can still have toxic effects on the relationship between patients and physicians when they are not handled with care.

“This system is not neutral for doctors,” she said.

Dr. Bismark pointed out that her country's system isn't necessarily a model for countries like the United States because of the differences in size and the structure of the health care system. New Zealand is a country of 4 million people, and its per capita health care costs are about $1,857, compared with $5,267 in the United States, she said. And New Zealand's no-fault system exists in the context of universal state-funded health care coverage.

Abortion Refusal Clause

Insurance companies and health care providers have more flexibility to refuse to provide abortion services, information, or referrals under a provision in federal spending legislation passed at the end of last year. The provision withholds funds from government agencies that take punitive action against health care providers and insurers that don't provide abortion services or information. The measure is drawing the ire of abortion rights advocates. “What we're seeing here is our worst nightmare,” Kim Gandy, president of the National Organization for Women, said in a statement. “This cynical measure has imminently dangerous implications for women because it places their lives in the hands of insurance companies and overzealous medical administrative staff.” But antiabortion advocates applauded the provision as a measure that protects hospitals and health care providers from discrimination. Federal law currently allows “health care entities” to refuse to perform abortions; however, the law has traditionally been interpreted to protect individual physicians and training programs, not hospitals, health plans, nurses, and others, according to the U.S. Conference of Catholic Bishops. “This Amendment simply clarifies what should be obvious,” said Cathy Cleaver Ruse, director of planning and information for the group's Secretariat for Pro-Life Activities. “Legal protection for 'health care entities' should include the full range of participants who provide health care—no one who provides health care should be forced to participate in abortion.”

Covering the Uninsured

Universal coverage for all Americans is needed to solve the problem of lack of access to care, according to a new policy statement from the American College of Obstetricians and Gynecologists. The group continues to support its 1993 program, U.S. MaternaCare, which would ensure access to a full range of pregnancy, family planning, and infant care services to pregnant women and infants. But this is only a first step, according to the statement developed by ACOG's Committee on Health Care for Underserved Women. Ultimately, it is key to expand the basic benefits and coverage for all Americans, the committee said. “Health care providers need to be advocates for the goal of securing quality, affordable coverage for every American with active support of proposed local, state, and national legislation,” the committee said.

Abstinence Education Evaluated

Federally funded abstinence-only education programs contain errors and misinformation on the effectiveness of condoms, the risks of abortion, and the transmission of disease, according to a recent report from Rep. Henry Waxman (D-Calif.). The report reviewed school-based sex education curricula used by federally funded programs. For example, one curriculum states that data do not support the claim that condoms help prevent the spread of sexually-transmitted diseases. In another case, a curriculum states that 5%-10% of women who undergo abortions will become sterile. “Serious and pervasive problems with the accuracy of abstinence-only curricula may help explain why these programs have not been shown to protect adolescents from sexually transmitted diseases,” the report said.

No Global Cloning Ban

The United Nations could not come to a consensus to approve a global ban on all forms of human cloning. The United States and Costa Rica had led an effort to ban all cloning, including so-called therapeutic cloning, but the treaty did not draw enough support. But groups such as the Coalition for the Advancement of Medical Research have urged the United Nations to reject a wide-ranging ban that would apply to cloning that could aid in medical research and the development of therapies. “We're very gratified that the U.N. has backed away from an overreaching treaty that could harm medical research and hinder possible cures for millions throughout the world,” Daniel Perry, president of the coalition, said in a statement.

Racial Disparities in HIV

The number of HIV/AIDS diagnoses in the United States remained steady from 2000 to 2003, but the disease became more prevalent in African Americans during that time, according to an analysis from the Centers for Disease Control and Prevention. The rates of HIV/AIDS diagnosis among non-Hispanic African American females in 2003 (53 cases per 100,000 population) was more than 18 times higher than among white women and nearly 5 times higher than among Hispanic women. African American women also accounted for 69% of female HIV diagnoses from 2000 to 2003. The CDC analysis examined data from 32 states that conducted confidential, name-based reporting from 2000 through 2003.

Abortion Refusal Clause

Insurance companies and health care providers have more flexibility to refuse to provide abortion services, information, or referrals under a provision in federal spending legislation passed at the end of last year. The provision withholds funds from government agencies that take punitive action against health care providers and insurers that don't provide abortion services or information. The measure is drawing the ire of abortion rights advocates. “What we're seeing here is our worst nightmare,” Kim Gandy, president of the National Organization for Women, said in a statement. “This cynical measure has imminently dangerous implications for women because it places their lives in the hands of insurance companies and overzealous medical administrative staff.” But antiabortion advocates applauded the provision as a measure that protects hospitals and health care providers from discrimination. Federal law currently allows “health care entities” to refuse to perform abortions; however, the law has traditionally been interpreted to protect individual physicians and training programs, not hospitals, health plans, nurses, and others, according to the U.S. Conference of Catholic Bishops. “This Amendment simply clarifies what should be obvious,” said Cathy Cleaver Ruse, director of planning and information for the group's Secretariat for Pro-Life Activities. “Legal protection for 'health care entities' should include the full range of participants who provide health care—no one who provides health care should be forced to participate in abortion.”

Covering the Uninsured

Universal coverage for all Americans is needed to solve the problem of lack of access to care, according to a new policy statement from the American College of Obstetricians and Gynecologists. The group continues to support its 1993 program, U.S. MaternaCare, which would ensure access to a full range of pregnancy, family planning, and infant care services to pregnant women and infants. But this is only a first step, according to the statement developed by ACOG's Committee on Health Care for Underserved Women. Ultimately, it is key to expand the basic benefits and coverage for all Americans, the committee said. “Health care providers need to be advocates for the goal of securing quality, affordable coverage for every American with active support of proposed local, state, and national legislation,” the committee said.

Abstinence Education Evaluated

Federally funded abstinence-only education programs contain errors and misinformation on the effectiveness of condoms, the risks of abortion, and the transmission of disease, according to a recent report from Rep. Henry Waxman (D-Calif.). The report reviewed school-based sex education curricula used by federally funded programs. For example, one curriculum states that data do not support the claim that condoms help prevent the spread of sexually-transmitted diseases. In another case, a curriculum states that 5%-10% of women who undergo abortions will become sterile. “Serious and pervasive problems with the accuracy of abstinence-only curricula may help explain why these programs have not been shown to protect adolescents from sexually transmitted diseases,” the report said.

No Global Cloning Ban

The United Nations could not come to a consensus to approve a global ban on all forms of human cloning. The United States and Costa Rica had led an effort to ban all cloning, including so-called therapeutic cloning, but the treaty did not draw enough support. But groups such as the Coalition for the Advancement of Medical Research have urged the United Nations to reject a wide-ranging ban that would apply to cloning that could aid in medical research and the development of therapies. “We're very gratified that the U.N. has backed away from an overreaching treaty that could harm medical research and hinder possible cures for millions throughout the world,” Daniel Perry, president of the coalition, said in a statement.

Racial Disparities in HIV

The number of HIV/AIDS diagnoses in the United States remained steady from 2000 to 2003, but the disease became more prevalent in African Americans during that time, according to an analysis from the Centers for Disease Control and Prevention. The rates of HIV/AIDS diagnosis among non-Hispanic African American females in 2003 (53 cases per 100,000 population) was more than 18 times higher than among white women and nearly 5 times higher than among Hispanic women. African American women also accounted for 69% of female HIV diagnoses from 2000 to 2003. The CDC analysis examined data from 32 states that conducted confidential, name-based reporting from 2000 through 2003.

Abortion Refusal Clause

Insurance companies and health care providers have more flexibility to refuse to provide abortion services, information, or referrals under a provision in federal spending legislation passed at the end of last year. The provision withholds funds from government agencies that take punitive action against health care providers and insurers that don't provide abortion services or information. The measure is drawing the ire of abortion rights advocates. “What we're seeing here is our worst nightmare,” Kim Gandy, president of the National Organization for Women, said in a statement. “This cynical measure has imminently dangerous implications for women because it places their lives in the hands of insurance companies and overzealous medical administrative staff.” But antiabortion advocates applauded the provision as a measure that protects hospitals and health care providers from discrimination. Federal law currently allows “health care entities” to refuse to perform abortions; however, the law has traditionally been interpreted to protect individual physicians and training programs, not hospitals, health plans, nurses, and others, according to the U.S. Conference of Catholic Bishops. “This Amendment simply clarifies what should be obvious,” said Cathy Cleaver Ruse, director of planning and information for the group's Secretariat for Pro-Life Activities. “Legal protection for 'health care entities' should include the full range of participants who provide health care—no one who provides health care should be forced to participate in abortion.”

Covering the Uninsured

Universal coverage for all Americans is needed to solve the problem of lack of access to care, according to a new policy statement from the American College of Obstetricians and Gynecologists. The group continues to support its 1993 program, U.S. MaternaCare, which would ensure access to a full range of pregnancy, family planning, and infant care services to pregnant women and infants. But this is only a first step, according to the statement developed by ACOG's Committee on Health Care for Underserved Women. Ultimately, it is key to expand the basic benefits and coverage for all Americans, the committee said. “Health care providers need to be advocates for the goal of securing quality, affordable coverage for every American with active support of proposed local, state, and national legislation,” the committee said.

Abstinence Education Evaluated

Federally funded abstinence-only education programs contain errors and misinformation on the effectiveness of condoms, the risks of abortion, and the transmission of disease, according to a recent report from Rep. Henry Waxman (D-Calif.). The report reviewed school-based sex education curricula used by federally funded programs. For example, one curriculum states that data do not support the claim that condoms help prevent the spread of sexually-transmitted diseases. In another case, a curriculum states that 5%-10% of women who undergo abortions will become sterile. “Serious and pervasive problems with the accuracy of abstinence-only curricula may help explain why these programs have not been shown to protect adolescents from sexually transmitted diseases,” the report said.

No Global Cloning Ban

The United Nations could not come to a consensus to approve a global ban on all forms of human cloning. The United States and Costa Rica had led an effort to ban all cloning, including so-called therapeutic cloning, but the treaty did not draw enough support. But groups such as the Coalition for the Advancement of Medical Research have urged the United Nations to reject a wide-ranging ban that would apply to cloning that could aid in medical research and the development of therapies. “We're very gratified that the U.N. has backed away from an overreaching treaty that could harm medical research and hinder possible cures for millions throughout the world,” Daniel Perry, president of the coalition, said in a statement.

Racial Disparities in HIV

The number of HIV/AIDS diagnoses in the United States remained steady from 2000 to 2003, but the disease became more prevalent in African Americans during that time, according to an analysis from the Centers for Disease Control and Prevention. The rates of HIV/AIDS diagnosis among non-Hispanic African American females in 2003 (53 cases per 100,000 population) was more than 18 times higher than among white women and nearly 5 times higher than among Hispanic women. African American women also accounted for 69% of female HIV diagnoses from 2000 to 2003. The CDC analysis examined data from 32 states that conducted confidential, name-based reporting from 2000 through 2003.

Arthritis Top 10

The development of experimental biologic agents to treat rheumatoid arthritis is 1 of the top 10 arthritis advances of last year, according to a list compiled by the Arthritis Foundation. The group also noted successes in the new scientific discoveries about a gene linked to the increased risk of RA, lupus, and other autoimmune conditions; the use of predictive markers to improve RA diagnosis and outcomes; and research that shows the effectiveness of a combination of diet and exercise on improving function and reducing knee pain in overweight patients with knee osteoarthritis. Also among the top 10: research that suggests doxycycline could slow osteoarthritis progression and a potential new therapy to slow bone loss; Medicare's pilot project to provide some coverage of self-injected medications to 50,000 beneficiaries with rheumatoid and psoriatic arthritis; the first arthritis-specific federal legislation in more than 30 years—the Arthritis Prevention, Control, and Cure Act of 2004; the Joint Commission on Accreditation of Healthcare Organizations' wrong-site surgery protocol; and experts' introduction of 51 quality measures for people with osteoarthritis, rheumatoid arthritis, or anyone using analgesics.

Guidance on Inpatient Status

To help physicians do a better job of admitting patients to the hospital, the Centers for Medicare and Medicaid Services should simplify its use of the terms “observation” and “inpatient admission,” a federal advisory panel has recommended. The Practicing Physicians Advisory Council drew up the resolution after CMS officials indicated that there was some “confusion” between hospitals and admitting physicians on patient status. Specifically, there are times when a hospital admits a patient to inpatient status when the physician intended the patient to be admitted for observation. The panel recommended that CMS provide this guidance on the “MedLearn Matters” Web site, which posts articles to Medicare providers that help them understand new or changed Medicare policy.

Payments for the Elderly

U.S. seniors spent an average of $11,089 out of pocket on health care goods and services in 1999, but nearly half that amount was reimbursed by Medicare, and another 15% was paid for by Medicaid, according to a CMS report. The amount spent by seniors was quadruple the average of $2,793 for people under age 65. “What this report shows is the importance of our efforts to bring down the high cost of health care for America's seniors,” CMS Administrator Mark B. McClellan, M.D., said in a statement. Although people aged 65 and over made up only 13% of the population in 1999, they accounted for 36% of personal health care spending, according to the report. Conversely, children made up 29% of the population but accounted only for 12% of personal health care spending.

Impact of Drug Advertisements

It's a good source for informing and educating patients about prescription drugs, but direct-to-consumer advertising also has its disadvantages, the Food and Drug Administration concluded from the results of three surveys. Two of the surveys focused on patients, but a third questioned 250 primary care physicians and 250 specialists on direct-to-consumer advertising's role in influencing practice patterns and patient interactions. Among physicians, 41% said direct-to-consumer advertising exposure had its benefits, increasing patient awareness about conditions and treatments. But another 41% thought exposure to an advertisement resulted in patient confusion about the effectiveness of the drug. Primary care physicians (38%) were more likely than were specialists (27%) to rate direct-to-consumer advertising as having a somewhat or very negative effect on their patients and practice.

Patients See Few Improvements

Many Americans haven't seen an improvement in health care quality since the release of the Institute of Medicine's report on medical errors 5 years ago. A telephone survey of 2,012 adults found that 40% thought the quality of health care has gotten worse over this time period, compared with the 17% who thought it had improved. Overall, 38% thought that quality of care stayed the same. Forty-eight percent said they were concerned about the safety of the medical care they received, and 55% said they were dissatisfied with the quality of care—up from 44% in a similar survey conducted 4 years ago. Patients with chronic conditions were more likely than were other consumers to express concerns about their quality of care, and to report experiences with medical errors. Survey sponsors included the Kaiser Family Foundation, the Agency for Healthcare Research and Quality, and the Harvard School of Public Health.

Arthritis Top 10

The development of experimental biologic agents to treat rheumatoid arthritis is 1 of the top 10 arthritis advances of last year, according to a list compiled by the Arthritis Foundation. The group also noted successes in the new scientific discoveries about a gene linked to the increased risk of RA, lupus, and other autoimmune conditions; the use of predictive markers to improve RA diagnosis and outcomes; and research that shows the effectiveness of a combination of diet and exercise on improving function and reducing knee pain in overweight patients with knee osteoarthritis. Also among the top 10: research that suggests doxycycline could slow osteoarthritis progression and a potential new therapy to slow bone loss; Medicare's pilot project to provide some coverage of self-injected medications to 50,000 beneficiaries with rheumatoid and psoriatic arthritis; the first arthritis-specific federal legislation in more than 30 years—the Arthritis Prevention, Control, and Cure Act of 2004; the Joint Commission on Accreditation of Healthcare Organizations' wrong-site surgery protocol; and experts' introduction of 51 quality measures for people with osteoarthritis, rheumatoid arthritis, or anyone using analgesics.

Guidance on Inpatient Status

To help physicians do a better job of admitting patients to the hospital, the Centers for Medicare and Medicaid Services should simplify its use of the terms “observation” and “inpatient admission,” a federal advisory panel has recommended. The Practicing Physicians Advisory Council drew up the resolution after CMS officials indicated that there was some “confusion” between hospitals and admitting physicians on patient status. Specifically, there are times when a hospital admits a patient to inpatient status when the physician intended the patient to be admitted for observation. The panel recommended that CMS provide this guidance on the “MedLearn Matters” Web site, which posts articles to Medicare providers that help them understand new or changed Medicare policy.

Payments for the Elderly

U.S. seniors spent an average of $11,089 out of pocket on health care goods and services in 1999, but nearly half that amount was reimbursed by Medicare, and another 15% was paid for by Medicaid, according to a CMS report. The amount spent by seniors was quadruple the average of $2,793 for people under age 65. “What this report shows is the importance of our efforts to bring down the high cost of health care for America's seniors,” CMS Administrator Mark B. McClellan, M.D., said in a statement. Although people aged 65 and over made up only 13% of the population in 1999, they accounted for 36% of personal health care spending, according to the report. Conversely, children made up 29% of the population but accounted only for 12% of personal health care spending.

Impact of Drug Advertisements

It's a good source for informing and educating patients about prescription drugs, but direct-to-consumer advertising also has its disadvantages, the Food and Drug Administration concluded from the results of three surveys. Two of the surveys focused on patients, but a third questioned 250 primary care physicians and 250 specialists on direct-to-consumer advertising's role in influencing practice patterns and patient interactions. Among physicians, 41% said direct-to-consumer advertising exposure had its benefits, increasing patient awareness about conditions and treatments. But another 41% thought exposure to an advertisement resulted in patient confusion about the effectiveness of the drug. Primary care physicians (38%) were more likely than were specialists (27%) to rate direct-to-consumer advertising as having a somewhat or very negative effect on their patients and practice.

Patients See Few Improvements

Many Americans haven't seen an improvement in health care quality since the release of the Institute of Medicine's report on medical errors 5 years ago. A telephone survey of 2,012 adults found that 40% thought the quality of health care has gotten worse over this time period, compared with the 17% who thought it had improved. Overall, 38% thought that quality of care stayed the same. Forty-eight percent said they were concerned about the safety of the medical care they received, and 55% said they were dissatisfied with the quality of care—up from 44% in a similar survey conducted 4 years ago. Patients with chronic conditions were more likely than were other consumers to express concerns about their quality of care, and to report experiences with medical errors. Survey sponsors included the Kaiser Family Foundation, the Agency for Healthcare Research and Quality, and the Harvard School of Public Health.

Arthritis Top 10

The development of experimental biologic agents to treat rheumatoid arthritis is 1 of the top 10 arthritis advances of last year, according to a list compiled by the Arthritis Foundation. The group also noted successes in the new scientific discoveries about a gene linked to the increased risk of RA, lupus, and other autoimmune conditions; the use of predictive markers to improve RA diagnosis and outcomes; and research that shows the effectiveness of a combination of diet and exercise on improving function and reducing knee pain in overweight patients with knee osteoarthritis. Also among the top 10: research that suggests doxycycline could slow osteoarthritis progression and a potential new therapy to slow bone loss; Medicare's pilot project to provide some coverage of self-injected medications to 50,000 beneficiaries with rheumatoid and psoriatic arthritis; the first arthritis-specific federal legislation in more than 30 years—the Arthritis Prevention, Control, and Cure Act of 2004; the Joint Commission on Accreditation of Healthcare Organizations' wrong-site surgery protocol; and experts' introduction of 51 quality measures for people with osteoarthritis, rheumatoid arthritis, or anyone using analgesics.

Guidance on Inpatient Status

To help physicians do a better job of admitting patients to the hospital, the Centers for Medicare and Medicaid Services should simplify its use of the terms “observation” and “inpatient admission,” a federal advisory panel has recommended. The Practicing Physicians Advisory Council drew up the resolution after CMS officials indicated that there was some “confusion” between hospitals and admitting physicians on patient status. Specifically, there are times when a hospital admits a patient to inpatient status when the physician intended the patient to be admitted for observation. The panel recommended that CMS provide this guidance on the “MedLearn Matters” Web site, which posts articles to Medicare providers that help them understand new or changed Medicare policy.

Payments for the Elderly

U.S. seniors spent an average of $11,089 out of pocket on health care goods and services in 1999, but nearly half that amount was reimbursed by Medicare, and another 15% was paid for by Medicaid, according to a CMS report. The amount spent by seniors was quadruple the average of $2,793 for people under age 65. “What this report shows is the importance of our efforts to bring down the high cost of health care for America's seniors,” CMS Administrator Mark B. McClellan, M.D., said in a statement. Although people aged 65 and over made up only 13% of the population in 1999, they accounted for 36% of personal health care spending, according to the report. Conversely, children made up 29% of the population but accounted only for 12% of personal health care spending.

Impact of Drug Advertisements

It's a good source for informing and educating patients about prescription drugs, but direct-to-consumer advertising also has its disadvantages, the Food and Drug Administration concluded from the results of three surveys. Two of the surveys focused on patients, but a third questioned 250 primary care physicians and 250 specialists on direct-to-consumer advertising's role in influencing practice patterns and patient interactions. Among physicians, 41% said direct-to-consumer advertising exposure had its benefits, increasing patient awareness about conditions and treatments. But another 41% thought exposure to an advertisement resulted in patient confusion about the effectiveness of the drug. Primary care physicians (38%) were more likely than were specialists (27%) to rate direct-to-consumer advertising as having a somewhat or very negative effect on their patients and practice.

Patients See Few Improvements

Many Americans haven't seen an improvement in health care quality since the release of the Institute of Medicine's report on medical errors 5 years ago. A telephone survey of 2,012 adults found that 40% thought the quality of health care has gotten worse over this time period, compared with the 17% who thought it had improved. Overall, 38% thought that quality of care stayed the same. Forty-eight percent said they were concerned about the safety of the medical care they received, and 55% said they were dissatisfied with the quality of care—up from 44% in a similar survey conducted 4 years ago. Patients with chronic conditions were more likely than were other consumers to express concerns about their quality of care, and to report experiences with medical errors. Survey sponsors included the Kaiser Family Foundation, the Agency for Healthcare Research and Quality, and the Harvard School of Public Health.

While medical liability and health care reform remain the top issues for many physicians this year, of particular urgency is a fix to Medicare's flawed payment formula, which threatens cuts of up to 5% in 2006 and cumulative cuts of 30% through 2012.

“It's certainly one of our top priorities for the coming legislative year,” Paul Speidell, government affairs representative for the Medical Group Management Association (MGMA), told this newspaper. Health information technology and other capital investments “are all thrown into question for the physician practice community when you're looking at cuts that major,” he said.

The issue should generate widespread interest, as “every member of Congress has physicians and Medicare beneficiaries in their district,” Mr. Speidell said. All of the physician groups who spoke with this newspaper detailed grassroots and other efforts to get Congress to avert the cuts.

The Medicare physician fee schedule “is a likely subject for our committees and it's possible we'll do hearings” on the issue this year, although no specific agenda has been discussed, said Jon Tripp, deputy communications director with the Energy and Commerce Committee.

An ideal scenario would be to scrap the sustainable growth rate (SGR), a component in the physician pay formula that determines each year's update, and to “look toward a vision of paying for performance and rewarding quality,” a Senate aide told this newspaper.

That approach comes with a high price tag: The Congressional Budget Office estimates it would cost $95 billion to replace the SGR. Exploring that option “really all depends on what the budget outlook is for this year,” the aide said.

No matter what the cost, the fix needs to be done, Robert Doherty, senior vice president for governmental affairs and public policy with the American College of Physicians, said in an interview. “The cost of fixing this may be high, but the reason it's high is because the hole is so deep—and we didn't dig that hole. All we're asking is to fill in that hole so we're breaking even.”

The budget situation is clearly the biggest obstacle, Mr. Doherty said. “If the deficit wasn't bad as it is, it wouldn't be that difficult.”

While no one can predict whether Congress will pursue a permanent fix or a temporary reprieve as they've done in the past, physicians would gain more credibility if Congress didn't focus solely on fixing the SGR, Mr. Doherty said. “We need to engage in other reforms to the physician payments system to make it more functional for the physician, payer, and patient,” he said. For example, medical organizations could talk to Congress about integrating a pay-for-performance component into Medicare, he said.

Malpractice reform is on the top of President Bush's health care agenda and will likely take precedence over the public health safety net and other health care reforms in 2005. Several physician groups and the administration have long advocated a $250,000 cap on noneconomic damages as part of a reform package.

The hurdle ahead is getting the Senate to approve such a bill, Matt Salo, director of the health and human services committee with the National Governors Association, told this newspaper. “Ultimately, you need 60 votes in the Senate to get a bill through. While the Republican margin is a little larger after the elections, it's not 60,” Mr. Salo said.

Passage of the bill is possible, provided that all 55 Republicans in the Senate vote for it, Mr. Doherty said. But physicians will have to decide which is more important: their desire for a Medicare payment increase or their desire for medical liability reform, a Republican House staff member said at a meeting sponsored by the American Bar Association.

“They've got two competing interests,” he said. And while some physician groups may pursue liability reform on the assumption that Congress is probably going to pass the payment increase anyway, that isn't necessarily the case, the aide said.

Physicians are also holding their breath on the expected transition from the International Classification of Diseases, 9th Revision (ICD-9)—the current diagnosis and inpatient procedure classification system—to the 10th revision (ICD-10).

An upgrade had been recommended on the premise that the ICD-9 was too antiquated to address the need for accurate health care billing in today's technology-driven environment. But physician groups remain concerned that ICD-10 has the potential to drive up costs and add new hassles to physician practice.

The Department of Health and Human Services may issue a proposed rule in 2005, although it's questionable that regulators are looking for more feedback at this point, Robert M. Tennant, MGMA's senior policy advisor for health informatics, said in an interview. Such a notice would more likely be designed “to give us a heads-up, rather than ask questions” that could lead to changes in the rule, he said.

Physicians would prefer a staggered implementation date, Mr. Tennant said. In addition, “we would like health plans to be compliant first, so physician practices could have time to get their systems upgraded and complete their testing and staff training,” he said.

The new year also brings new leadership to the federal health bureaucracy. At press time, President Bush named Michael O. Leavitt as his pick to lead HHS. Mr. Leavitt served as the administrator of the Environmental Protection Agency in the president's first administration and was previously governor of Utah. Mr. Leavitt must be confirmed by the Senate before assuming his new duties.

Joyce Frieden, Jennifer Silverman, and Mary Ellen Schneider contributed to this report.

ACR Eyes Bottom Line, Formularies

The top focus for the American College of Rheumatology this year will be changing physician reimbursement under Medicare, said Joseph Flood, M.D., chairman of ACR's government affairs committee.

Unless there's a significant change in the statute next year, there will be cuts to physicians' pay, he said. This comes at a time when prices for everything in the physician's office have gone up, but reimbursement has not, he said. And the rates set by Medicare affect how other insurers reimburse physicians because they usually follow Medicare's lead.

ACR is also keeping an eye on the list of covered drugs that will be available under Medicare's Part D drug benefit. If the list of drugs is too restrictive, it's not a real step forward, Dr. Flood said.

For example, ACR is concerned that the proposed framework for structuring drug formularies would allow prescription drug plans to exclude important medications like cyclooxygenase-2 (COX-2) inhibitors. “We need to have the opportunity of looking at different drugs for our patients,” Dr. Flood said.

In addition, formularies shouldn't include heavy administrative burdens for physicians, he said.

Rheumatologists will be advocating for passage of the Arthritis Prevention, Control, and Cure Act, which would support programs in arthritis and encourage research. It would also help efforts to recruit people into pediatric rheumatology. The bill was introduced in 2004 and had a lot of support, Dr. Flood said. ACR officials expect that the bill will be reintroduced this year.

ACR will also be focusing on the payments for the purchase of Part B drugs under Medicare. The Centers for Medicare and Medicaid Services recently announced the addition of new codes for drug administration that pay physicians more for performing complex infusion therapy. But this increase is offset by declines in payments for the drugs themselves.

Although ACR favors a system that pays appropriately for the administration of the drug, Dr. Flood said, officials want to ensure that the calculation of the average sales price of the drug is not detrimental to individual physicians who lack the buying power of larger groups.

ACR is concerned about the annual congressional appropriations process. They would like to see more money appropriated for research at the National Institutes of Health and the Department of Veterans Affairs in the area of arthritis.

More Doctors in the House—and Senate

Physicians are heading to Capitol Hill this month and not just to lobby. Below are the results of last year's House and Senate races in which a physician ran for office.

House of Representatives

Arkansas, 2nd District:

Florida, 15th District:

Georgia, 6th District: Tom Price, M.D. (R), was unopposed

Georgia, 11th District:

Illinois, 15th District: David Gill, M.D. (D), lost to

Louisiana, 3rd District: Kevin Chiasson, M.D. (R), lost to Charles Melancon (D)

Louisiana, 7th District: Charles Boustany, Jr., M.D. (R), defeated Willie Mount (D)

Michigan, 7th District: Joseph Schwarz, M.D. (R), defeated Sharon Renier (D)

New Jersey, 3rd District: Herb Conaway, M.D. (D), lost to

New York, 24th District: David Walrath, M.D. (Conservative Party), lost to

North Carolina, 12th District: Ada M. Fisher, M.D. (R), lost to

Pennsylvania, 13th District: Melissa Brown, M.D. (R), lost to Allyson Schwartz (D)

Pennsylvania, 18th District: Mark Boles, M.D. (D), lost to

Texas, 14th District:

Texas, 26th District:

Washington, 7th District:

Senate

Kentucky: Dan Mongiardo, M.D. (D), lost to

New York: Marilyn O'Grady, M.D. (Conservative Party), lost to

Oklahoma: Tom Coburn, M.D. (R), defeated Brad Carson (D)

While medical liability and health care reform remain the top issues for many physicians this year, of particular urgency is a fix to Medicare's flawed payment formula, which threatens cuts of up to 5% in 2006 and cumulative cuts of 30% through 2012.

“It's certainly one of our top priorities for the coming legislative year,” Paul Speidell, government affairs representative for the Medical Group Management Association (MGMA), told this newspaper. Health information technology and other capital investments “are all thrown into question for the physician practice community when you're looking at cuts that major,” he said.

The issue should generate widespread interest, as “every member of Congress has physicians and Medicare beneficiaries in their district,” Mr. Speidell said. All of the physician groups who spoke with this newspaper detailed grassroots and other efforts to get Congress to avert the cuts.

The Medicare physician fee schedule “is a likely subject for our committees and it's possible we'll do hearings” on the issue this year, although no specific agenda has been discussed, said Jon Tripp, deputy communications director with the Energy and Commerce Committee.

An ideal scenario would be to scrap the sustainable growth rate (SGR), a component in the physician pay formula that determines each year's update, and to “look toward a vision of paying for performance and rewarding quality,” a Senate aide told this newspaper.

That approach comes with a high price tag: The Congressional Budget Office estimates it would cost $95 billion to replace the SGR. Exploring that option “really all depends on what the budget outlook is for this year,” the aide said.

No matter what the cost, the fix needs to be done, Robert Doherty, senior vice president for governmental affairs and public policy with the American College of Physicians, said in an interview. “The cost of fixing this may be high, but the reason it's high is because the hole is so deep—and we didn't dig that hole. All we're asking is to fill in that hole so we're breaking even.”

The budget situation is clearly the biggest obstacle, Mr. Doherty said. “If the deficit wasn't bad as it is, it wouldn't be that difficult.”

While no one can predict whether Congress will pursue a permanent fix or a temporary reprieve as they've done in the past, physicians would gain more credibility if Congress didn't focus solely on fixing the SGR, Mr. Doherty said. “We need to engage in other reforms to the physician payments system to make it more functional for the physician, payer, and patient,” he said. For example, medical organizations could talk to Congress about integrating a pay-for-performance component into Medicare, he said.

Malpractice reform is on the top of President Bush's health care agenda and will likely take precedence over the public health safety net and other health care reforms in 2005. Several physician groups and the administration have long advocated a $250,000 cap on noneconomic damages as part of a reform package.

The hurdle ahead is getting the Senate to approve such a bill, Matt Salo, director of the health and human services committee with the National Governors Association, told this newspaper. “Ultimately, you need 60 votes in the Senate to get a bill through. While the Republican margin is a little larger after the elections, it's not 60,” Mr. Salo said.

Passage of the bill is possible, provided that all 55 Republicans in the Senate vote for it, Mr. Doherty said. But physicians will have to decide which is more important: their desire for a Medicare payment increase or their desire for medical liability reform, a Republican House staff member said at a meeting sponsored by the American Bar Association.

“They've got two competing interests,” he said. And while some physician groups may pursue liability reform on the assumption that Congress is probably going to pass the payment increase anyway, that isn't necessarily the case, the aide said.

Physicians are also holding their breath on the expected transition from the International Classification of Diseases, 9th Revision (ICD-9)—the current diagnosis and inpatient procedure classification system—to the 10th revision (ICD-10).

An upgrade had been recommended on the premise that the ICD-9 was too antiquated to address the need for accurate health care billing in today's technology-driven environment. But physician groups remain concerned that ICD-10 has the potential to drive up costs and add new hassles to physician practice.

The Department of Health and Human Services may issue a proposed rule in 2005, although it's questionable that regulators are looking for more feedback at this point, Robert M. Tennant, MGMA's senior policy advisor for health informatics, said in an interview. Such a notice would more likely be designed “to give us a heads-up, rather than ask questions” that could lead to changes in the rule, he said.

Physicians would prefer a staggered implementation date, Mr. Tennant said. In addition, “we would like health plans to be compliant first, so physician practices could have time to get their systems upgraded and complete their testing and staff training,” he said.

The new year also brings new leadership to the federal health bureaucracy. At press time, President Bush named Michael O. Leavitt as his pick to lead HHS. Mr. Leavitt served as the administrator of the Environmental Protection Agency in the president's first administration and was previously governor of Utah. Mr. Leavitt must be confirmed by the Senate before assuming his new duties.

Joyce Frieden, Jennifer Silverman, and Mary Ellen Schneider contributed to this report.

ACR Eyes Bottom Line, Formularies

The top focus for the American College of Rheumatology this year will be changing physician reimbursement under Medicare, said Joseph Flood, M.D., chairman of ACR's government affairs committee.

Unless there's a significant change in the statute next year, there will be cuts to physicians' pay, he said. This comes at a time when prices for everything in the physician's office have gone up, but reimbursement has not, he said. And the rates set by Medicare affect how other insurers reimburse physicians because they usually follow Medicare's lead.

ACR is also keeping an eye on the list of covered drugs that will be available under Medicare's Part D drug benefit. If the list of drugs is too restrictive, it's not a real step forward, Dr. Flood said.

For example, ACR is concerned that the proposed framework for structuring drug formularies would allow prescription drug plans to exclude important medications like cyclooxygenase-2 (COX-2) inhibitors. “We need to have the opportunity of looking at different drugs for our patients,” Dr. Flood said.

In addition, formularies shouldn't include heavy administrative burdens for physicians, he said.

Rheumatologists will be advocating for passage of the Arthritis Prevention, Control, and Cure Act, which would support programs in arthritis and encourage research. It would also help efforts to recruit people into pediatric rheumatology. The bill was introduced in 2004 and had a lot of support, Dr. Flood said. ACR officials expect that the bill will be reintroduced this year.

ACR will also be focusing on the payments for the purchase of Part B drugs under Medicare. The Centers for Medicare and Medicaid Services recently announced the addition of new codes for drug administration that pay physicians more for performing complex infusion therapy. But this increase is offset by declines in payments for the drugs themselves.

Although ACR favors a system that pays appropriately for the administration of the drug, Dr. Flood said, officials want to ensure that the calculation of the average sales price of the drug is not detrimental to individual physicians who lack the buying power of larger groups.

ACR is concerned about the annual congressional appropriations process. They would like to see more money appropriated for research at the National Institutes of Health and the Department of Veterans Affairs in the area of arthritis.

More Doctors in the House—and Senate

Physicians are heading to Capitol Hill this month and not just to lobby. Below are the results of last year's House and Senate races in which a physician ran for office.

House of Representatives

Arkansas, 2nd District:

Florida, 15th District:

Georgia, 6th District: Tom Price, M.D. (R), was unopposed

Georgia, 11th District:

Illinois, 15th District: David Gill, M.D. (D), lost to

Louisiana, 3rd District: Kevin Chiasson, M.D. (R), lost to Charles Melancon (D)

Louisiana, 7th District: Charles Boustany, Jr., M.D. (R), defeated Willie Mount (D)

Michigan, 7th District: Joseph Schwarz, M.D. (R), defeated Sharon Renier (D)

New Jersey, 3rd District: Herb Conaway, M.D. (D), lost to

New York, 24th District: David Walrath, M.D. (Conservative Party), lost to

North Carolina, 12th District: Ada M. Fisher, M.D. (R), lost to

Pennsylvania, 13th District: Melissa Brown, M.D. (R), lost to Allyson Schwartz (D)

Pennsylvania, 18th District: Mark Boles, M.D. (D), lost to

Texas, 14th District:

Texas, 26th District:

Washington, 7th District:

Senate

Kentucky: Dan Mongiardo, M.D. (D), lost to

New York: Marilyn O'Grady, M.D. (Conservative Party), lost to

Oklahoma: Tom Coburn, M.D. (R), defeated Brad Carson (D)

While medical liability and health care reform remain the top issues for many physicians this year, of particular urgency is a fix to Medicare's flawed payment formula, which threatens cuts of up to 5% in 2006 and cumulative cuts of 30% through 2012.

“It's certainly one of our top priorities for the coming legislative year,” Paul Speidell, government affairs representative for the Medical Group Management Association (MGMA), told this newspaper. Health information technology and other capital investments “are all thrown into question for the physician practice community when you're looking at cuts that major,” he said.

The issue should generate widespread interest, as “every member of Congress has physicians and Medicare beneficiaries in their district,” Mr. Speidell said. All of the physician groups who spoke with this newspaper detailed grassroots and other efforts to get Congress to avert the cuts.

The Medicare physician fee schedule “is a likely subject for our committees and it's possible we'll do hearings” on the issue this year, although no specific agenda has been discussed, said Jon Tripp, deputy communications director with the Energy and Commerce Committee.

An ideal scenario would be to scrap the sustainable growth rate (SGR), a component in the physician pay formula that determines each year's update, and to “look toward a vision of paying for performance and rewarding quality,” a Senate aide told this newspaper.

That approach comes with a high price tag: The Congressional Budget Office estimates it would cost $95 billion to replace the SGR. Exploring that option “really all depends on what the budget outlook is for this year,” the aide said.

No matter what the cost, the fix needs to be done, Robert Doherty, senior vice president for governmental affairs and public policy with the American College of Physicians, said in an interview. “The cost of fixing this may be high, but the reason it's high is because the hole is so deep—and we didn't dig that hole. All we're asking is to fill in that hole so we're breaking even.”

The budget situation is clearly the biggest obstacle, Mr. Doherty said. “If the deficit wasn't bad as it is, it wouldn't be that difficult.”

While no one can predict whether Congress will pursue a permanent fix or a temporary reprieve as they've done in the past, physicians would gain more credibility if Congress didn't focus solely on fixing the SGR, Mr. Doherty said. “We need to engage in other reforms to the physician payments system to make it more functional for the physician, payer, and patient,” he said. For example, medical organizations could talk to Congress about integrating a pay-for-performance component into Medicare, he said.

Malpractice reform is on the top of President Bush's health care agenda and will likely take precedence over the public health safety net and other health care reforms in 2005. Several physician groups and the administration have long advocated a $250,000 cap on noneconomic damages as part of a reform package.

The hurdle ahead is getting the Senate to approve such a bill, Matt Salo, director of the health and human services committee with the National Governors Association, told this newspaper. “Ultimately, you need 60 votes in the Senate to get a bill through. While the Republican margin is a little larger after the elections, it's not 60,” Mr. Salo said.

Passage of the bill is possible, provided that all 55 Republicans in the Senate vote for it, Mr. Doherty said. But physicians will have to decide which is more important: their desire for a Medicare payment increase or their desire for medical liability reform, a Republican House staff member said at a meeting sponsored by the American Bar Association.

“They've got two competing interests,” he said. And while some physician groups may pursue liability reform on the assumption that Congress is probably going to pass the payment increase anyway, that isn't necessarily the case, the aide said.

Physicians are also holding their breath on the expected transition from the International Classification of Diseases, 9th Revision (ICD-9)—the current diagnosis and inpatient procedure classification system—to the 10th revision (ICD-10).

An upgrade had been recommended on the premise that the ICD-9 was too antiquated to address the need for accurate health care billing in today's technology-driven environment. But physician groups remain concerned that ICD-10 has the potential to drive up costs and add new hassles to physician practice.

The Department of Health and Human Services may issue a proposed rule in 2005, although it's questionable that regulators are looking for more feedback at this point, Robert M. Tennant, MGMA's senior policy advisor for health informatics, said in an interview. Such a notice would more likely be designed “to give us a heads-up, rather than ask questions” that could lead to changes in the rule, he said.

Physicians would prefer a staggered implementation date, Mr. Tennant said. In addition, “we would like health plans to be compliant first, so physician practices could have time to get their systems upgraded and complete their testing and staff training,” he said.

The new year also brings new leadership to the federal health bureaucracy. At press time, President Bush named Michael O. Leavitt as his pick to lead HHS. Mr. Leavitt served as the administrator of the Environmental Protection Agency in the president's first administration and was previously governor of Utah. Mr. Leavitt must be confirmed by the Senate before assuming his new duties.

Joyce Frieden, Jennifer Silverman, and Mary Ellen Schneider contributed to this report.

ACR Eyes Bottom Line, Formularies

The top focus for the American College of Rheumatology this year will be changing physician reimbursement under Medicare, said Joseph Flood, M.D., chairman of ACR's government affairs committee.

Unless there's a significant change in the statute next year, there will be cuts to physicians' pay, he said. This comes at a time when prices for everything in the physician's office have gone up, but reimbursement has not, he said. And the rates set by Medicare affect how other insurers reimburse physicians because they usually follow Medicare's lead.

ACR is also keeping an eye on the list of covered drugs that will be available under Medicare's Part D drug benefit. If the list of drugs is too restrictive, it's not a real step forward, Dr. Flood said.

For example, ACR is concerned that the proposed framework for structuring drug formularies would allow prescription drug plans to exclude important medications like cyclooxygenase-2 (COX-2) inhibitors. “We need to have the opportunity of looking at different drugs for our patients,” Dr. Flood said.

In addition, formularies shouldn't include heavy administrative burdens for physicians, he said.

Rheumatologists will be advocating for passage of the Arthritis Prevention, Control, and Cure Act, which would support programs in arthritis and encourage research. It would also help efforts to recruit people into pediatric rheumatology. The bill was introduced in 2004 and had a lot of support, Dr. Flood said. ACR officials expect that the bill will be reintroduced this year.

ACR will also be focusing on the payments for the purchase of Part B drugs under Medicare. The Centers for Medicare and Medicaid Services recently announced the addition of new codes for drug administration that pay physicians more for performing complex infusion therapy. But this increase is offset by declines in payments for the drugs themselves.

Although ACR favors a system that pays appropriately for the administration of the drug, Dr. Flood said, officials want to ensure that the calculation of the average sales price of the drug is not detrimental to individual physicians who lack the buying power of larger groups.

ACR is concerned about the annual congressional appropriations process. They would like to see more money appropriated for research at the National Institutes of Health and the Department of Veterans Affairs in the area of arthritis.

More Doctors in the House—and Senate

Physicians are heading to Capitol Hill this month and not just to lobby. Below are the results of last year's House and Senate races in which a physician ran for office.

House of Representatives

Arkansas, 2nd District:

Florida, 15th District:

Georgia, 6th District: Tom Price, M.D. (R), was unopposed

Georgia, 11th District:

Illinois, 15th District: David Gill, M.D. (D), lost to

Louisiana, 3rd District: Kevin Chiasson, M.D. (R), lost to Charles Melancon (D)

Louisiana, 7th District: Charles Boustany, Jr., M.D. (R), defeated Willie Mount (D)

Michigan, 7th District: Joseph Schwarz, M.D. (R), defeated Sharon Renier (D)

New Jersey, 3rd District: Herb Conaway, M.D. (D), lost to

New York, 24th District: David Walrath, M.D. (Conservative Party), lost to

North Carolina, 12th District: Ada M. Fisher, M.D. (R), lost to

Pennsylvania, 13th District: Melissa Brown, M.D. (R), lost to Allyson Schwartz (D)

Pennsylvania, 18th District: Mark Boles, M.D. (D), lost to

Texas, 14th District:

Texas, 26th District:

Washington, 7th District:

Senate

Kentucky: Dan Mongiardo, M.D. (D), lost to

New York: Marilyn O'Grady, M.D. (Conservative Party), lost to

Oklahoma: Tom Coburn, M.D. (R), defeated Brad Carson (D)

Regulating Imaging Services

The Medicare Payment Advisory Commission will vote this month on a series of proposals including one to require all diagnostic imaging providers to meet standards for imaging equipment, nonphysician staff, the images produced, and patient safety protocols. In addition, MedPAC is also considering whether to call for the development of standards for physicians who bill Medicare for interpreting imaging studies. This month MedPAC will also decide whether to expand the definition of physician ownership to include ownership interests in an entity that derives a substantial portion of its revenue from a provider of designated health services like an imaging center. The proposal came under fire from cardiology groups such as the American College of Cardiology and the American Society of Echocardiography. MedPAC should engage in an examination of the factors that are causing a growth in imaging services and try to assess if this is medically necessary growth, Suma Thomas, M.D., a cardiologist at Barnes Jewish Hospital, St. Louis, told MedPAC members in December.

Lessons From Clinton

A group of interventional cardiologists and cardiovascular researchers is looking to former President Bill Clinton to put the spotlight on their campaign for heart attack eradication. The Association for Eradication of Heart Attack (AEHA) sent an open letter to Mr. Clinton last year asking him to lend his support to their efforts. The group is pushing for the National SHAPE (Screening for Heart Attack Prevention and Education) Program, which helps physicians identify patients, like the former president, who would be susceptible to a heart attack. The program also encourages all men 45 and older and women 55 and older to undergo a comprehensive vascular structure and function assessment test. If Mr. Clinton had undergone this type of screening, his disease would likely have been discovered and treated without the need to rush open heart surgery, according to AEHA.

Quality Measures

The Centers for Medicare and Medicaid Services is proposing new standardized quality measures for the care given in physicians' offices. The goal is to measure improvement of care for coronary artery disease, heart failure, diabetes, hypertension, osteoarthritis, asthma, behavioral health, prenatal care, and preventive care. CMS submitted its proposed standardized measures to the National Quality Forum for review and comment. The agency anticipates that the approved measures will be incorporated into ongoing quality improvement efforts and demonstrations that will be underway early this year. “By collecting this information, we will be able to use these ambulatory care measures to pay providers for improving the quality of care,” said CMS Administrator Mark McClellan, M.D.

A National Diabetes Plan

The federal government recently unveiled a step-by-step guide to activities and resources for people with diabetes. The plan includes steps for individuals, businesses, government agencies, and others. For example, individuals are encouraged to reduce fat consumption, take the stairs instead of the elevator, and get screened for diabetes. The government strategies include developing evidence-based strategies to prevent, detect, and treat the disease. “This action plan provides specific steps that everyone can take to fight diabetes,” Health and Human Services Tommy G. Thompson said in a statement. “The most effective way to bring this problem under control is for government, business, health care providers, schools, communities and the media, as well as people with diabetes and their families to work together.”

Impact of Drug Advertisements

It's a good source for informing and educating patients about prescription drugs, but direct-to-consumer advertising also has its disadvantages, the Food and Drug Administration concluded from the results of three surveys. Two of the surveys focused on patients, but a third questioned 250 primary care physicians and 250 specialists. Among them, 41% said direct-to-consumer advertising exposure had its benefits, increasing patient awareness about conditions and treatments. But another 41% thought exposure to the advertisement resulted in patient confusion about the effectiveness of the drug. Primary care physicians (38%) were more likely than were specialists (27%) to rate direct-to-consumer advertising as having a somewhat or very negative effect on their patients and practice. Nearly half of all physicians reported feeling “at least a little pressure” to prescribe these drugs, although both patients and physicians thought the ads overstated the efficacy of the drugs, and did not present a fair balance of benefit and risk information.

Regulating Imaging Services

The Medicare Payment Advisory Commission will vote this month on a series of proposals including one to require all diagnostic imaging providers to meet standards for imaging equipment, nonphysician staff, the images produced, and patient safety protocols. In addition, MedPAC is also considering whether to call for the development of standards for physicians who bill Medicare for interpreting imaging studies. This month MedPAC will also decide whether to expand the definition of physician ownership to include ownership interests in an entity that derives a substantial portion of its revenue from a provider of designated health services like an imaging center. The proposal came under fire from cardiology groups such as the American College of Cardiology and the American Society of Echocardiography. MedPAC should engage in an examination of the factors that are causing a growth in imaging services and try to assess if this is medically necessary growth, Suma Thomas, M.D., a cardiologist at Barnes Jewish Hospital, St. Louis, told MedPAC members in December.

Lessons From Clinton

A group of interventional cardiologists and cardiovascular researchers is looking to former President Bill Clinton to put the spotlight on their campaign for heart attack eradication. The Association for Eradication of Heart Attack (AEHA) sent an open letter to Mr. Clinton last year asking him to lend his support to their efforts. The group is pushing for the National SHAPE (Screening for Heart Attack Prevention and Education) Program, which helps physicians identify patients, like the former president, who would be susceptible to a heart attack. The program also encourages all men 45 and older and women 55 and older to undergo a comprehensive vascular structure and function assessment test. If Mr. Clinton had undergone this type of screening, his disease would likely have been discovered and treated without the need to rush open heart surgery, according to AEHA.

Quality Measures

The Centers for Medicare and Medicaid Services is proposing new standardized quality measures for the care given in physicians' offices. The goal is to measure improvement of care for coronary artery disease, heart failure, diabetes, hypertension, osteoarthritis, asthma, behavioral health, prenatal care, and preventive care. CMS submitted its proposed standardized measures to the National Quality Forum for review and comment. The agency anticipates that the approved measures will be incorporated into ongoing quality improvement efforts and demonstrations that will be underway early this year. “By collecting this information, we will be able to use these ambulatory care measures to pay providers for improving the quality of care,” said CMS Administrator Mark McClellan, M.D.

A National Diabetes Plan

The federal government recently unveiled a step-by-step guide to activities and resources for people with diabetes. The plan includes steps for individuals, businesses, government agencies, and others. For example, individuals are encouraged to reduce fat consumption, take the stairs instead of the elevator, and get screened for diabetes. The government strategies include developing evidence-based strategies to prevent, detect, and treat the disease. “This action plan provides specific steps that everyone can take to fight diabetes,” Health and Human Services Tommy G. Thompson said in a statement. “The most effective way to bring this problem under control is for government, business, health care providers, schools, communities and the media, as well as people with diabetes and their families to work together.”

Impact of Drug Advertisements

It's a good source for informing and educating patients about prescription drugs, but direct-to-consumer advertising also has its disadvantages, the Food and Drug Administration concluded from the results of three surveys. Two of the surveys focused on patients, but a third questioned 250 primary care physicians and 250 specialists. Among them, 41% said direct-to-consumer advertising exposure had its benefits, increasing patient awareness about conditions and treatments. But another 41% thought exposure to the advertisement resulted in patient confusion about the effectiveness of the drug. Primary care physicians (38%) were more likely than were specialists (27%) to rate direct-to-consumer advertising as having a somewhat or very negative effect on their patients and practice. Nearly half of all physicians reported feeling “at least a little pressure” to prescribe these drugs, although both patients and physicians thought the ads overstated the efficacy of the drugs, and did not present a fair balance of benefit and risk information.

Regulating Imaging Services

The Medicare Payment Advisory Commission will vote this month on a series of proposals including one to require all diagnostic imaging providers to meet standards for imaging equipment, nonphysician staff, the images produced, and patient safety protocols. In addition, MedPAC is also considering whether to call for the development of standards for physicians who bill Medicare for interpreting imaging studies. This month MedPAC will also decide whether to expand the definition of physician ownership to include ownership interests in an entity that derives a substantial portion of its revenue from a provider of designated health services like an imaging center. The proposal came under fire from cardiology groups such as the American College of Cardiology and the American Society of Echocardiography. MedPAC should engage in an examination of the factors that are causing a growth in imaging services and try to assess if this is medically necessary growth, Suma Thomas, M.D., a cardiologist at Barnes Jewish Hospital, St. Louis, told MedPAC members in December.

Lessons From Clinton

A group of interventional cardiologists and cardiovascular researchers is looking to former President Bill Clinton to put the spotlight on their campaign for heart attack eradication. The Association for Eradication of Heart Attack (AEHA) sent an open letter to Mr. Clinton last year asking him to lend his support to their efforts. The group is pushing for the National SHAPE (Screening for Heart Attack Prevention and Education) Program, which helps physicians identify patients, like the former president, who would be susceptible to a heart attack. The program also encourages all men 45 and older and women 55 and older to undergo a comprehensive vascular structure and function assessment test. If Mr. Clinton had undergone this type of screening, his disease would likely have been discovered and treated without the need to rush open heart surgery, according to AEHA.

Quality Measures

The Centers for Medicare and Medicaid Services is proposing new standardized quality measures for the care given in physicians' offices. The goal is to measure improvement of care for coronary artery disease, heart failure, diabetes, hypertension, osteoarthritis, asthma, behavioral health, prenatal care, and preventive care. CMS submitted its proposed standardized measures to the National Quality Forum for review and comment. The agency anticipates that the approved measures will be incorporated into ongoing quality improvement efforts and demonstrations that will be underway early this year. “By collecting this information, we will be able to use these ambulatory care measures to pay providers for improving the quality of care,” said CMS Administrator Mark McClellan, M.D.

A National Diabetes Plan

The federal government recently unveiled a step-by-step guide to activities and resources for people with diabetes. The plan includes steps for individuals, businesses, government agencies, and others. For example, individuals are encouraged to reduce fat consumption, take the stairs instead of the elevator, and get screened for diabetes. The government strategies include developing evidence-based strategies to prevent, detect, and treat the disease. “This action plan provides specific steps that everyone can take to fight diabetes,” Health and Human Services Tommy G. Thompson said in a statement. “The most effective way to bring this problem under control is for government, business, health care providers, schools, communities and the media, as well as people with diabetes and their families to work together.”

Impact of Drug Advertisements

It's a good source for informing and educating patients about prescription drugs, but direct-to-consumer advertising also has its disadvantages, the Food and Drug Administration concluded from the results of three surveys. Two of the surveys focused on patients, but a third questioned 250 primary care physicians and 250 specialists. Among them, 41% said direct-to-consumer advertising exposure had its benefits, increasing patient awareness about conditions and treatments. But another 41% thought exposure to the advertisement resulted in patient confusion about the effectiveness of the drug. Primary care physicians (38%) were more likely than were specialists (27%) to rate direct-to-consumer advertising as having a somewhat or very negative effect on their patients and practice. Nearly half of all physicians reported feeling “at least a little pressure” to prescribe these drugs, although both patients and physicians thought the ads overstated the efficacy of the drugs, and did not present a fair balance of benefit and risk information.

The Centers for Disease Control and Prevention's Advisory Committee on Immunization Practices passed a resolution to expand the groups of children recommended to receive influenza vaccine under the Vaccines for Children program this season.

ACIP, which advises CDC on immunization issues, recommended that VFC-eligible children who are household contacts of persons at high-risk for influenza receive the vaccine. The resolution, approved in late December, went into effect immediately.

ACIP also recommended that more adults receive the influenza vaccine, if adequate supplies of the vaccine are available.

ACIP recommended that health departments and health care providers who have adequate vaccine to meet the demands of high-risk groups, should also make influenza vaccine available to adults aged 50-64, and out-of-home caregivers and household contacts of persons in high-risk groups. That change was effective Jan. 3.

The Centers for Disease Control and Prevention's Advisory Committee on Immunization Practices passed a resolution to expand the groups of children recommended to receive influenza vaccine under the Vaccines for Children program this season.

ACIP, which advises CDC on immunization issues, recommended that VFC-eligible children who are household contacts of persons at high-risk for influenza receive the vaccine. The resolution, approved in late December, went into effect immediately.

ACIP also recommended that more adults receive the influenza vaccine, if adequate supplies of the vaccine are available.

ACIP recommended that health departments and health care providers who have adequate vaccine to meet the demands of high-risk groups, should also make influenza vaccine available to adults aged 50-64, and out-of-home caregivers and household contacts of persons in high-risk groups. That change was effective Jan. 3.

The Centers for Disease Control and Prevention's Advisory Committee on Immunization Practices passed a resolution to expand the groups of children recommended to receive influenza vaccine under the Vaccines for Children program this season.

ACIP, which advises CDC on immunization issues, recommended that VFC-eligible children who are household contacts of persons at high-risk for influenza receive the vaccine. The resolution, approved in late December, went into effect immediately.

ACIP also recommended that more adults receive the influenza vaccine, if adequate supplies of the vaccine are available.

ACIP recommended that health departments and health care providers who have adequate vaccine to meet the demands of high-risk groups, should also make influenza vaccine available to adults aged 50-64, and out-of-home caregivers and household contacts of persons in high-risk groups. That change was effective Jan. 3.

WASHINGTON — Medicare currently is not equipped to handle care for chronic illnesses, so officials at the Centers for Medicare and Medicaid Services are testing out some new approaches.

“What we're really after is to change Medicare's role from a passive payer of services … to a more aggressive purchaser of better health care for our beneficiaries,” said Stuart Guterman, director of the Office of Research, Development, and Information at CMS.

In fee-for-service Medicare, there is no incentive to coordinate care. The emphasis is on the provision of services by individual physicians, and care is centered on single encounters, Mr. Guterman said at a meeting on Medicare and Medicaid sponsored by America's Health Insurance Plans.

Instead, CMS officials are planning a number of demonstration projects to look at the impact of capitated payment systems for patients with high-cost illnesses, “gainsharing” arrangements with physicians, and financial incentives for the adoption of health information technology.

Currently, Medicare is running the Coordinated Care Demonstration project with fee-for-service beneficiaries in 15 sites around the country. The project tests whether paying for coordinated care for beneficiaries with chronic illnesses can produce better outcomes without increasing costs. The project focuses on heart failure; heart, liver, and lung diseases; Alzheimer's and other dementias; cancer; and HIV/AIDS.

The initial results from the project show that beneficiary recruitment can be a challenge but that most of the successful plans have been those with close ties to physicians, Mr. Guterman said.

The agency has several more demonstration projects planned. CMS recently received approval to move forward with the Physicians Group Practice demonstration, which will offer bonus payments to large, multispecialty physician groups that achieve savings through improvements in the management of patient care and services.

In addition to the bonus payments, physicians will be paid on a fee-for-service basis.

The agency is seeking approval for its End-Stage Renal Disease Management demonstration, which will provide fully risk-adjusted capitated payment for treatment of ESRD beneficiaries.

“[This is] a portion of the population that is very much in need of better coordination of care,” Mr. Guterman said.

Currently ESRD beneficiaries have broad coverage for services besides dialysis, but that care is generally not coordinated across all of their conditions, he said. This demonstration is aimed at providing an incentive for physicians to coordinate care across the entire spectrum of care.

CMS is also developing the Medicare Care Management Performance demonstration, a project that was mandated under the Medicare Modernization Act.

It would provide financial incentives to encourage physicians to adopt health information technology and to use the technology to better manage chronic care patients.

“We believe information technology is an important tool, and it's a tool to accomplish better quality of care for our beneficiaries,” Mr. Guterman said. “Just buying doctors computers isn't what we're after. We want them to be able to use better information systems to be able to run their practices better.”

Also in the pipeline is a demonstration aimed at managing care for high-cost beneficiaries with serious illnesses. The project, which is scheduled to run for 3 years, will emphasize provider-oriented models, Mr. Guterman said.

“One of the things we've heard in our disease management initiatives is that they're third-party oriented, that is, physicians have been commenting that we're paying a third-party management organization to do what physicians should be getting paid to do,” he said.

WASHINGTON — Medicare currently is not equipped to handle care for chronic illnesses, so officials at the Centers for Medicare and Medicaid Services are testing out some new approaches.

“What we're really after is to change Medicare's role from a passive payer of services … to a more aggressive purchaser of better health care for our beneficiaries,” said Stuart Guterman, director of the Office of Research, Development, and Information at CMS.

In fee-for-service Medicare, there is no incentive to coordinate care. The emphasis is on the provision of services by individual physicians, and care is centered on single encounters, Mr. Guterman said at a meeting on Medicare and Medicaid sponsored by America's Health Insurance Plans.

Instead, CMS officials are planning a number of demonstration projects to look at the impact of capitated payment systems for patients with high-cost illnesses, “gainsharing” arrangements with physicians, and financial incentives for the adoption of health information technology.

Currently, Medicare is running the Coordinated Care Demonstration project with fee-for-service beneficiaries in 15 sites around the country. The project tests whether paying for coordinated care for beneficiaries with chronic illnesses can produce better outcomes without increasing costs. The project focuses on heart failure; heart, liver, and lung diseases; Alzheimer's and other dementias; cancer; and HIV/AIDS.

The initial results from the project show that beneficiary recruitment can be a challenge but that most of the successful plans have been those with close ties to physicians, Mr. Guterman said.

The agency has several more demonstration projects planned. CMS recently received approval to move forward with the Physicians Group Practice demonstration, which will offer bonus payments to large, multispecialty physician groups that achieve savings through improvements in the management of patient care and services.

In addition to the bonus payments, physicians will be paid on a fee-for-service basis.

The agency is seeking approval for its End-Stage Renal Disease Management demonstration, which will provide fully risk-adjusted capitated payment for treatment of ESRD beneficiaries.

“[This is] a portion of the population that is very much in need of better coordination of care,” Mr. Guterman said.

Currently ESRD beneficiaries have broad coverage for services besides dialysis, but that care is generally not coordinated across all of their conditions, he said. This demonstration is aimed at providing an incentive for physicians to coordinate care across the entire spectrum of care.

CMS is also developing the Medicare Care Management Performance demonstration, a project that was mandated under the Medicare Modernization Act.

It would provide financial incentives to encourage physicians to adopt health information technology and to use the technology to better manage chronic care patients.

“We believe information technology is an important tool, and it's a tool to accomplish better quality of care for our beneficiaries,” Mr. Guterman said. “Just buying doctors computers isn't what we're after. We want them to be able to use better information systems to be able to run their practices better.”

Also in the pipeline is a demonstration aimed at managing care for high-cost beneficiaries with serious illnesses. The project, which is scheduled to run for 3 years, will emphasize provider-oriented models, Mr. Guterman said.

“One of the things we've heard in our disease management initiatives is that they're third-party oriented, that is, physicians have been commenting that we're paying a third-party management organization to do what physicians should be getting paid to do,” he said.

WASHINGTON — Medicare currently is not equipped to handle care for chronic illnesses, so officials at the Centers for Medicare and Medicaid Services are testing out some new approaches.

“What we're really after is to change Medicare's role from a passive payer of services … to a more aggressive purchaser of better health care for our beneficiaries,” said Stuart Guterman, director of the Office of Research, Development, and Information at CMS.

In fee-for-service Medicare, there is no incentive to coordinate care. The emphasis is on the provision of services by individual physicians, and care is centered on single encounters, Mr. Guterman said at a meeting on Medicare and Medicaid sponsored by America's Health Insurance Plans.

Instead, CMS officials are planning a number of demonstration projects to look at the impact of capitated payment systems for patients with high-cost illnesses, “gainsharing” arrangements with physicians, and financial incentives for the adoption of health information technology.

Currently, Medicare is running the Coordinated Care Demonstration project with fee-for-service beneficiaries in 15 sites around the country. The project tests whether paying for coordinated care for beneficiaries with chronic illnesses can produce better outcomes without increasing costs. The project focuses on heart failure; heart, liver, and lung diseases; Alzheimer's and other dementias; cancer; and HIV/AIDS.

The initial results from the project show that beneficiary recruitment can be a challenge but that most of the successful plans have been those with close ties to physicians, Mr. Guterman said.

The agency has several more demonstration projects planned. CMS recently received approval to move forward with the Physicians Group Practice demonstration, which will offer bonus payments to large, multispecialty physician groups that achieve savings through improvements in the management of patient care and services.

In addition to the bonus payments, physicians will be paid on a fee-for-service basis.

The agency is seeking approval for its End-Stage Renal Disease Management demonstration, which will provide fully risk-adjusted capitated payment for treatment of ESRD beneficiaries.

“[This is] a portion of the population that is very much in need of better coordination of care,” Mr. Guterman said.

Currently ESRD beneficiaries have broad coverage for services besides dialysis, but that care is generally not coordinated across all of their conditions, he said. This demonstration is aimed at providing an incentive for physicians to coordinate care across the entire spectrum of care.

CMS is also developing the Medicare Care Management Performance demonstration, a project that was mandated under the Medicare Modernization Act.

It would provide financial incentives to encourage physicians to adopt health information technology and to use the technology to better manage chronic care patients.

“We believe information technology is an important tool, and it's a tool to accomplish better quality of care for our beneficiaries,” Mr. Guterman said. “Just buying doctors computers isn't what we're after. We want them to be able to use better information systems to be able to run their practices better.”

Also in the pipeline is a demonstration aimed at managing care for high-cost beneficiaries with serious illnesses. The project, which is scheduled to run for 3 years, will emphasize provider-oriented models, Mr. Guterman said.

“One of the things we've heard in our disease management initiatives is that they're third-party oriented, that is, physicians have been commenting that we're paying a third-party management organization to do what physicians should be getting paid to do,” he said.

WASHINGTON — The Medicare Payment Advisory Commission is considering redistributing 1%-2% of Medicare physician payments to physicians who demonstrate quality based on certain performance measures.

But what measures to use, how to obtain the quality information, and whether to base payments on performance by individual physicians or group practices are still up in the air. Linking an even greater portion of physician pay to quality might be necessary to make the plan viable, commission member Arnold Milstein, M.D., said at a recent commission meeting.

Private-sector experiences indicate that in order for physicians to put a high priority on quality measures, payments need to be more than 10%, Dr. Milstein said, compared with the current 5%-10% on the table from insurers.

“I also agree that we should put more and more of the payment at risk,” said Ralph W. Muller, a MedPAC member and CEO of the University of Pennsylvania Health System.

Over 3-5 years, Medicare should increase the amount of the payment that is at risk, he said.

“We've now seen 30 years of evidence that the payment system drives behavior more powerfully than almost everything else. So if you want quality to be a bigger part of the agenda, as we are suggesting it should be, then more and more of the payment system in fact has to be tied to quality,” Mr. Muller said.

But taking 1%-2% of Medicare physician payment and redistributing it based on quality may have a much bigger impact than larger payments from private insurers because of the larger average share of Medicare patients in many physician practices, said Glenn Hackbarth, MedPAC chairman and an independent consultant from Bend, Ore. “The 1%-2% is a starting point,” Mr. Hackbarth said, “not necessary an end point.”

It would be better to start out at a lower level of payments as Medicare officials figure out the best measures to use, but keep the door open to increasing the amount of payments linked to quality over time, he said.

But Mary Frank, M.D., president of the American Academy of Family Physicians, cautioned that to make pay for performance work, Medicare officials can't just redistribute the payments. Additional funding will be needed to provide real financial incentives, but over time, the system will gain because improvements in quality and efficiency will decrease costs, she said in an interview with this newspaper.

Alan R. Nelson, M.D., a MedPAC member and an internist, cautioned that the commission members should be careful about pay for performance.

“We have to be aware as we proceed with this of unintended consequences that could end up in worse patient care, rather than better patient care,” Dr. Nelson said.

Although that's not a factor in the majority of situations, unintended consequences could occur, he said. For example, linking quality payments in the area of avoidable hospitalizations could create a disincentive. It can be difficult for physicians to decide how far to go in managing a patient's care successfully at home or if the patient needs to go into the hospital, Dr. Nelson said, but if there is a financial incentive to keep patients at home, it could create a greater risk for patients.

Pay for performance also leaves the door open to “cherry picking” of patients, Dr. Nelson said. For example, a physician may choose not to provide care to a patient who smokes, because that patient would hurt the physician's quality numbers.

The commission should also exercise caution in how it chooses to collect data, Dr. Nelson said. If Medicare is going to collect quality data using methods that impose an additional administrative burden on physicians, that time should be reimbursed. Physicians want to do a good job, he said, but they won't embrace unfunded mandates.

WASHINGTON — The Medicare Payment Advisory Commission is considering redistributing 1%-2% of Medicare physician payments to physicians who demonstrate quality based on certain performance measures.

But what measures to use, how to obtain the quality information, and whether to base payments on performance by individual physicians or group practices are still up in the air. Linking an even greater portion of physician pay to quality might be necessary to make the plan viable, commission member Arnold Milstein, M.D., said at a recent commission meeting.

Private-sector experiences indicate that in order for physicians to put a high priority on quality measures, payments need to be more than 10%, Dr. Milstein said, compared with the current 5%-10% on the table from insurers.

“I also agree that we should put more and more of the payment at risk,” said Ralph W. Muller, a MedPAC member and CEO of the University of Pennsylvania Health System.

Over 3-5 years, Medicare should increase the amount of the payment that is at risk, he said.

“We've now seen 30 years of evidence that the payment system drives behavior more powerfully than almost everything else. So if you want quality to be a bigger part of the agenda, as we are suggesting it should be, then more and more of the payment system in fact has to be tied to quality,” Mr. Muller said.

But taking 1%-2% of Medicare physician payment and redistributing it based on quality may have a much bigger impact than larger payments from private insurers because of the larger average share of Medicare patients in many physician practices, said Glenn Hackbarth, MedPAC chairman and an independent consultant from Bend, Ore. “The 1%-2% is a starting point,” Mr. Hackbarth said, “not necessary an end point.”

It would be better to start out at a lower level of payments as Medicare officials figure out the best measures to use, but keep the door open to increasing the amount of payments linked to quality over time, he said.

But Mary Frank, M.D., president of the American Academy of Family Physicians, cautioned that to make pay for performance work, Medicare officials can't just redistribute the payments. Additional funding will be needed to provide real financial incentives, but over time, the system will gain because improvements in quality and efficiency will decrease costs, she said in an interview with this newspaper.

Alan R. Nelson, M.D., a MedPAC member and an internist, cautioned that the commission members should be careful about pay for performance.

“We have to be aware as we proceed with this of unintended consequences that could end up in worse patient care, rather than better patient care,” Dr. Nelson said.

Although that's not a factor in the majority of situations, unintended consequences could occur, he said. For example, linking quality payments in the area of avoidable hospitalizations could create a disincentive. It can be difficult for physicians to decide how far to go in managing a patient's care successfully at home or if the patient needs to go into the hospital, Dr. Nelson said, but if there is a financial incentive to keep patients at home, it could create a greater risk for patients.

Pay for performance also leaves the door open to “cherry picking” of patients, Dr. Nelson said. For example, a physician may choose not to provide care to a patient who smokes, because that patient would hurt the physician's quality numbers.

The commission should also exercise caution in how it chooses to collect data, Dr. Nelson said. If Medicare is going to collect quality data using methods that impose an additional administrative burden on physicians, that time should be reimbursed. Physicians want to do a good job, he said, but they won't embrace unfunded mandates.

WASHINGTON — The Medicare Payment Advisory Commission is considering redistributing 1%-2% of Medicare physician payments to physicians who demonstrate quality based on certain performance measures.

But what measures to use, how to obtain the quality information, and whether to base payments on performance by individual physicians or group practices are still up in the air. Linking an even greater portion of physician pay to quality might be necessary to make the plan viable, commission member Arnold Milstein, M.D., said at a recent commission meeting.

Private-sector experiences indicate that in order for physicians to put a high priority on quality measures, payments need to be more than 10%, Dr. Milstein said, compared with the current 5%-10% on the table from insurers.

“I also agree that we should put more and more of the payment at risk,” said Ralph W. Muller, a MedPAC member and CEO of the University of Pennsylvania Health System.

Over 3-5 years, Medicare should increase the amount of the payment that is at risk, he said.

“We've now seen 30 years of evidence that the payment system drives behavior more powerfully than almost everything else. So if you want quality to be a bigger part of the agenda, as we are suggesting it should be, then more and more of the payment system in fact has to be tied to quality,” Mr. Muller said.

But taking 1%-2% of Medicare physician payment and redistributing it based on quality may have a much bigger impact than larger payments from private insurers because of the larger average share of Medicare patients in many physician practices, said Glenn Hackbarth, MedPAC chairman and an independent consultant from Bend, Ore. “The 1%-2% is a starting point,” Mr. Hackbarth said, “not necessary an end point.”

It would be better to start out at a lower level of payments as Medicare officials figure out the best measures to use, but keep the door open to increasing the amount of payments linked to quality over time, he said.

But Mary Frank, M.D., president of the American Academy of Family Physicians, cautioned that to make pay for performance work, Medicare officials can't just redistribute the payments. Additional funding will be needed to provide real financial incentives, but over time, the system will gain because improvements in quality and efficiency will decrease costs, she said in an interview with this newspaper.

Alan R. Nelson, M.D., a MedPAC member and an internist, cautioned that the commission members should be careful about pay for performance.

“We have to be aware as we proceed with this of unintended consequences that could end up in worse patient care, rather than better patient care,” Dr. Nelson said.

Although that's not a factor in the majority of situations, unintended consequences could occur, he said. For example, linking quality payments in the area of avoidable hospitalizations could create a disincentive. It can be difficult for physicians to decide how far to go in managing a patient's care successfully at home or if the patient needs to go into the hospital, Dr. Nelson said, but if there is a financial incentive to keep patients at home, it could create a greater risk for patients.

Pay for performance also leaves the door open to “cherry picking” of patients, Dr. Nelson said. For example, a physician may choose not to provide care to a patient who smokes, because that patient would hurt the physician's quality numbers.

The commission should also exercise caution in how it chooses to collect data, Dr. Nelson said. If Medicare is going to collect quality data using methods that impose an additional administrative burden on physicians, that time should be reimbursed. Physicians want to do a good job, he said, but they won't embrace unfunded mandates.