Alicia Ault

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

The Medical Home Program was announced by Bridges to Excellence in late January. So far, none of BTE's employers or payers have formally committed to the program, Mr. Francois de Brantes, CEO of the coalition, said in an interview. By late spring, however, he expects to “have a couple of exciting announcements.”

Mr. de Brantes noted that the rewards won't be limited to internists and family physicians. Being a specialist is not an obstacle. Any physician who meets the performance targets—including ob.gyns., endocrinologists, cardiologists, infectious disease specialists, and neurologists—can receive a medical home designation, he said.

Dr. Michael Barr said that the program might spur physicians who are already working on practice improvement, but not documenting it, to start doing so, thereby becoming eligible for the bonuses. The “patient ultimately benefits from better coordination” of care, Dr. Barr, vice president for practice advocacy and improvement at the American College of Physicians, added in an interview.

“We feel pretty confident that the rewards are warranted and that the savings are there to match them,” Mr. de Brantes said. “Our research shows that patients who are well taken care of cost less,” he said, adding that “the average potential savings per covered life would be approximately $250 a year.”

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

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

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

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

The organization is requiring high performance in two conditions—not just one—because achieving that benchmark will require “fundamentally changing your practice process flows and the way you care for patients,” he said. Once that shift occurs, quality improves for all patients. Physicians will receive rewards based on the total number of patients in the practice.

Most of the participants in the BTE coalition are committed to the notion of a medical home, Mr. de Brantes said. “Now it's a question of solidifying the implementation with those organizations and getting it done in various sites across the country,” he said.

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

The Medical Home Program was announced by Bridges to Excellence in late January. So far, none of BTE's employers or payers have formally committed to the program, Mr. Francois de Brantes, CEO of the coalition, said in an interview. By late spring, however, he expects to “have a couple of exciting announcements.”

Mr. de Brantes noted that the rewards won't be limited to internists and family physicians. Being a specialist is not an obstacle. Any physician who meets the performance targets—including ob.gyns., endocrinologists, cardiologists, infectious disease specialists, and neurologists—can receive a medical home designation, he said.

Dr. Michael Barr said that the program might spur physicians who are already working on practice improvement, but not documenting it, to start doing so, thereby becoming eligible for the bonuses. The “patient ultimately benefits from better coordination” of care, Dr. Barr, vice president for practice advocacy and improvement at the American College of Physicians, added in an interview.

“We feel pretty confident that the rewards are warranted and that the savings are there to match them,” Mr. de Brantes said. “Our research shows that patients who are well taken care of cost less,” he said, adding that “the average potential savings per covered life would be approximately $250 a year.”

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

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

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

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

The organization is requiring high performance in two conditions—not just one—because achieving that benchmark will require “fundamentally changing your practice process flows and the way you care for patients,” he said. Once that shift occurs, quality improves for all patients. Physicians will receive rewards based on the total number of patients in the practice.

Most of the participants in the BTE coalition are committed to the notion of a medical home, Mr. de Brantes said. “Now it's a question of solidifying the implementation with those organizations and getting it done in various sites across the country,” he said.

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

The Medical Home Program was announced by Bridges to Excellence in late January. So far, none of BTE's employers or payers have formally committed to the program, Mr. Francois de Brantes, CEO of the coalition, said in an interview. By late spring, however, he expects to “have a couple of exciting announcements.”

Mr. de Brantes noted that the rewards won't be limited to internists and family physicians. Being a specialist is not an obstacle. Any physician who meets the performance targets—including ob.gyns., endocrinologists, cardiologists, infectious disease specialists, and neurologists—can receive a medical home designation, he said.

Dr. Michael Barr said that the program might spur physicians who are already working on practice improvement, but not documenting it, to start doing so, thereby becoming eligible for the bonuses. The “patient ultimately benefits from better coordination” of care, Dr. Barr, vice president for practice advocacy and improvement at the American College of Physicians, added in an interview.

“We feel pretty confident that the rewards are warranted and that the savings are there to match them,” Mr. de Brantes said. “Our research shows that patients who are well taken care of cost less,” he said, adding that “the average potential savings per covered life would be approximately $250 a year.”

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

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

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

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

The organization is requiring high performance in two conditions—not just one—because achieving that benchmark will require “fundamentally changing your practice process flows and the way you care for patients,” he said. Once that shift occurs, quality improves for all patients. Physicians will receive rewards based on the total number of patients in the practice.

Most of the participants in the BTE coalition are committed to the notion of a medical home, Mr. de Brantes said. “Now it's a question of solidifying the implementation with those organizations and getting it done in various sites across the country,” he said.

Dr. Jeffrey Rich is trading in his scalpel for a bureaucrat's pen in the hope that he'll give Medicare a strong and credible push into a future that will reward those who deliver high-quality care at the best cost. The cardiothoracic surgeon took over as director of the Center for Medicare Management in February.

Dr. Rich has delved deeply into restructuring reimbursement to reward quality care through his work with the National Quality Forum, the Hospital Quality Alliance, the Surgical Quality Alliance, and the AQA alliance, among other organizations.

He also helped launch the Virginia Cardiac Surgery Quality Initiative, which was one of the initial participants in CMS's Hospital Quality Incentive Demonstration project.

Dr. Rich has served as chairman of the board of directors for the Virginia initiative and also as a member of the quality committee.

On three occasions, Dr. Rich has testified before Congress on how the federal government could construct a payment system to reward quality. He has also given a congressional briefing on pay for performance.

Even so, Dr. Rich said he's often felt like an outsider, trying to get policy makers' attention. Now, he'll be on the inside.

“I get a chance to open a door instead of knocking on it,” Dr. Rich said in an interview, noting that he's been “knocking on doors for years.”

As director of the Center for Medicare Management, he will lead several federal initiatives, such as instituting competitive bidding for durable medical equipment, implementing the Medicare Administrative Contractor program, and overseeing the development and promulgation of rules pertaining to inpatient, outpatient, and physician payments.

But his top priority is guiding the center's value-based purchasing initiative.

The Virginia Cardiac Surgery Quality Initiative ably combined the CMS administrative claims database with the Society of Thoracic Surgery registry, said Dr. Rich, adding that he'd like to do something similar while at CMS. “My hope is that we do create a value-based purchasing system with credible data and that will engender trust with providers,” he said.

The key will be to use “market-based approaches, not mandates,” Dr. Rich said.

Although he is excited about his opportunities and future with CMS, Dr. Rich did express some sadness about his forced retirement from surgery. “It didn't feel good to resign from my practice,” he said.

Dr. Rich worked as a surgeon with a group cardiothoracic surgery practice that is based at Sentara Heart Hospital in Norfolk, Va.. He also serves on the board of directors for the Society of Thoracic Surgeons.

Government ethics rules dictated that he quit, said Dr. Rich, although he added that he will be able to keep his hand in surgery by occasionally taking call when he returns home to Norfolk on the weekends after a work week split between Washington and CMS's Baltimore headquarters. That light duty has been cleared by the feds.

And, most likely, he'll be back to the operating room early next year. As with all presidential appointees, the law requires that he resign his position by the time the next president is sworn in on Jan. 20, 2009.

Although he could be kept on, Dr. Rich said “I'm not anticipating being there more than a year.”

Dr. Jeffrey Rich is trading in his scalpel for a bureaucrat's pen in the hope that he'll give Medicare a strong and credible push into a future that will reward those who deliver high-quality care at the best cost. The cardiothoracic surgeon took over as director of the Center for Medicare Management in February.

Dr. Rich has delved deeply into restructuring reimbursement to reward quality care through his work with the National Quality Forum, the Hospital Quality Alliance, the Surgical Quality Alliance, and the AQA alliance, among other organizations.

He also helped launch the Virginia Cardiac Surgery Quality Initiative, which was one of the initial participants in CMS's Hospital Quality Incentive Demonstration project.

Dr. Rich has served as chairman of the board of directors for the Virginia initiative and also as a member of the quality committee.

On three occasions, Dr. Rich has testified before Congress on how the federal government could construct a payment system to reward quality. He has also given a congressional briefing on pay for performance.

Even so, Dr. Rich said he's often felt like an outsider, trying to get policy makers' attention. Now, he'll be on the inside.

“I get a chance to open a door instead of knocking on it,” Dr. Rich said in an interview, noting that he's been “knocking on doors for years.”

As director of the Center for Medicare Management, he will lead several federal initiatives, such as instituting competitive bidding for durable medical equipment, implementing the Medicare Administrative Contractor program, and overseeing the development and promulgation of rules pertaining to inpatient, outpatient, and physician payments.

But his top priority is guiding the center's value-based purchasing initiative.

The Virginia Cardiac Surgery Quality Initiative ably combined the CMS administrative claims database with the Society of Thoracic Surgery registry, said Dr. Rich, adding that he'd like to do something similar while at CMS. “My hope is that we do create a value-based purchasing system with credible data and that will engender trust with providers,” he said.

The key will be to use “market-based approaches, not mandates,” Dr. Rich said.

Although he is excited about his opportunities and future with CMS, Dr. Rich did express some sadness about his forced retirement from surgery. “It didn't feel good to resign from my practice,” he said.

Dr. Rich worked as a surgeon with a group cardiothoracic surgery practice that is based at Sentara Heart Hospital in Norfolk, Va.. He also serves on the board of directors for the Society of Thoracic Surgeons.

Government ethics rules dictated that he quit, said Dr. Rich, although he added that he will be able to keep his hand in surgery by occasionally taking call when he returns home to Norfolk on the weekends after a work week split between Washington and CMS's Baltimore headquarters. That light duty has been cleared by the feds.

And, most likely, he'll be back to the operating room early next year. As with all presidential appointees, the law requires that he resign his position by the time the next president is sworn in on Jan. 20, 2009.

Although he could be kept on, Dr. Rich said “I'm not anticipating being there more than a year.”

Dr. Jeffrey Rich is trading in his scalpel for a bureaucrat's pen in the hope that he'll give Medicare a strong and credible push into a future that will reward those who deliver high-quality care at the best cost. The cardiothoracic surgeon took over as director of the Center for Medicare Management in February.

Dr. Rich has delved deeply into restructuring reimbursement to reward quality care through his work with the National Quality Forum, the Hospital Quality Alliance, the Surgical Quality Alliance, and the AQA alliance, among other organizations.

He also helped launch the Virginia Cardiac Surgery Quality Initiative, which was one of the initial participants in CMS's Hospital Quality Incentive Demonstration project.

Dr. Rich has served as chairman of the board of directors for the Virginia initiative and also as a member of the quality committee.

On three occasions, Dr. Rich has testified before Congress on how the federal government could construct a payment system to reward quality. He has also given a congressional briefing on pay for performance.

Even so, Dr. Rich said he's often felt like an outsider, trying to get policy makers' attention. Now, he'll be on the inside.

“I get a chance to open a door instead of knocking on it,” Dr. Rich said in an interview, noting that he's been “knocking on doors for years.”

As director of the Center for Medicare Management, he will lead several federal initiatives, such as instituting competitive bidding for durable medical equipment, implementing the Medicare Administrative Contractor program, and overseeing the development and promulgation of rules pertaining to inpatient, outpatient, and physician payments.

But his top priority is guiding the center's value-based purchasing initiative.

The Virginia Cardiac Surgery Quality Initiative ably combined the CMS administrative claims database with the Society of Thoracic Surgery registry, said Dr. Rich, adding that he'd like to do something similar while at CMS. “My hope is that we do create a value-based purchasing system with credible data and that will engender trust with providers,” he said.

The key will be to use “market-based approaches, not mandates,” Dr. Rich said.

Although he is excited about his opportunities and future with CMS, Dr. Rich did express some sadness about his forced retirement from surgery. “It didn't feel good to resign from my practice,” he said.

Dr. Rich worked as a surgeon with a group cardiothoracic surgery practice that is based at Sentara Heart Hospital in Norfolk, Va.. He also serves on the board of directors for the Society of Thoracic Surgeons.

Government ethics rules dictated that he quit, said Dr. Rich, although he added that he will be able to keep his hand in surgery by occasionally taking call when he returns home to Norfolk on the weekends after a work week split between Washington and CMS's Baltimore headquarters. That light duty has been cleared by the feds.

And, most likely, he'll be back to the operating room early next year. As with all presidential appointees, the law requires that he resign his position by the time the next president is sworn in on Jan. 20, 2009.

Although he could be kept on, Dr. Rich said “I'm not anticipating being there more than a year.”

WASHINGTON — The nation spent $2 trillion, or $7,000 per person, on health care in 2006. While that was only a small hike from 2005, America's prescription drug tab grew by 8.5%.

Health spending as a share of the nation's gross domestic product hit 16% in 2006.

Total spending on physician and clinical services grew 6% to $448 billion, the slowest growth since 1999. Physician pay crawled almost to a halt, largely because of the freeze in Medicare's reimbursement rates in 2006. Private insurers seemed to have followed suit, said Cathy Cowan, an economist at the Centers for Medicare and Medicaid Services. Ms. Cowan, a coauthor of an annual analysis of the nation's health spending, spoke at a briefing on the report.

Nursing home prices dropped; spending still grew 3.5% in 2006, less than the almost 5% increase in 2005. Home health services grew almost 10% in 2006, down from a 12% increase in 2005.

Medicare spending increased 19% to $401 billion, driven largely by the prescription drug benefit, the administration cost for that benefit, and Medicare Advantage.

Overall drug spending grew 8.5% in 2006—an increase from the 5.8% rise in spending in 2005. Half of the 2006 increase was due to greater utilization, not surprising since about 23 million Medicare beneficiaries took advantage of the new benefit. Prescription prices increased by only a little over 3%, according to an annual analysis by actuaries at the Centers for Medicare and Medicaid Services.

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

Medicare spent $41 billion on Part D in 2006, with $35 billion for drug purchases and $6 billion for administration and “net cost of insurance”—the cost of subsidizing premiums for low-income beneficiaries and costs for transferring beneficiaries into private plans. Medicare paid for 18% of all retail drugs, versus only 2% in 2005. Medicare took on costs previously covered by private insurers, Medicaid, and the uninsured.

On average, each Part D enrollee received $1,700 in benefits, according to CMS.

Generics accounted for 63% of drugs dispensed in the U.S. in 2006, according to the report.

The largest category of spending is hospital care, which eats up 31% of U.S. health dollars.

Consumers Union: Private Insurers Are Gouging

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

Each month since December 2005, the consumer advocacy group has tracked the prices of five drugs commonly used by Medicare beneficiaries in a single ZIP code in each of five states—California, New York, Illinois, Florida, and Texas.

The data are taken directly from

Medicare.gov

Consumers Union Senior Policy Analyst Bill Vaughan said in an interview the group found that prices generally rise the most from December to January—after a beneficiary has locked into a plan for the upcoming year. The average increase for the five drugs as a package (Lipitor, Celebrex, Zoloft, nifedipine ER, and Altace) was $369 from December 2007 to January 2008, according to Consumers Union.

Mr. Vaughan also noted: “These continual price hikes are Exhibit A for Congress to give renewed attention to negotiating drug prices on behalf of America's taxpayers and seniors, and offering the option of a Medicare-run drug benefit.”

WASHINGTON — The nation spent $2 trillion, or $7,000 per person, on health care in 2006. While that was only a small hike from 2005, America's prescription drug tab grew by 8.5%.

Health spending as a share of the nation's gross domestic product hit 16% in 2006.

Total spending on physician and clinical services grew 6% to $448 billion, the slowest growth since 1999. Physician pay crawled almost to a halt, largely because of the freeze in Medicare's reimbursement rates in 2006. Private insurers seemed to have followed suit, said Cathy Cowan, an economist at the Centers for Medicare and Medicaid Services. Ms. Cowan, a coauthor of an annual analysis of the nation's health spending, spoke at a briefing on the report.

Nursing home prices dropped; spending still grew 3.5% in 2006, less than the almost 5% increase in 2005. Home health services grew almost 10% in 2006, down from a 12% increase in 2005.

Medicare spending increased 19% to $401 billion, driven largely by the prescription drug benefit, the administration cost for that benefit, and Medicare Advantage.

Overall drug spending grew 8.5% in 2006—an increase from the 5.8% rise in spending in 2005. Half of the 2006 increase was due to greater utilization, not surprising since about 23 million Medicare beneficiaries took advantage of the new benefit. Prescription prices increased by only a little over 3%, according to an annual analysis by actuaries at the Centers for Medicare and Medicaid Services.

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

Medicare spent $41 billion on Part D in 2006, with $35 billion for drug purchases and $6 billion for administration and “net cost of insurance”—the cost of subsidizing premiums for low-income beneficiaries and costs for transferring beneficiaries into private plans. Medicare paid for 18% of all retail drugs, versus only 2% in 2005. Medicare took on costs previously covered by private insurers, Medicaid, and the uninsured.

On average, each Part D enrollee received $1,700 in benefits, according to CMS.

Generics accounted for 63% of drugs dispensed in the U.S. in 2006, according to the report.

The largest category of spending is hospital care, which eats up 31% of U.S. health dollars.

Consumers Union: Private Insurers Are Gouging

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

Each month since December 2005, the consumer advocacy group has tracked the prices of five drugs commonly used by Medicare beneficiaries in a single ZIP code in each of five states—California, New York, Illinois, Florida, and Texas.

The data are taken directly from

Medicare.gov

Consumers Union Senior Policy Analyst Bill Vaughan said in an interview the group found that prices generally rise the most from December to January—after a beneficiary has locked into a plan for the upcoming year. The average increase for the five drugs as a package (Lipitor, Celebrex, Zoloft, nifedipine ER, and Altace) was $369 from December 2007 to January 2008, according to Consumers Union.

Mr. Vaughan also noted: “These continual price hikes are Exhibit A for Congress to give renewed attention to negotiating drug prices on behalf of America's taxpayers and seniors, and offering the option of a Medicare-run drug benefit.”

WASHINGTON — The nation spent $2 trillion, or $7,000 per person, on health care in 2006. While that was only a small hike from 2005, America's prescription drug tab grew by 8.5%.

Health spending as a share of the nation's gross domestic product hit 16% in 2006.

Total spending on physician and clinical services grew 6% to $448 billion, the slowest growth since 1999. Physician pay crawled almost to a halt, largely because of the freeze in Medicare's reimbursement rates in 2006. Private insurers seemed to have followed suit, said Cathy Cowan, an economist at the Centers for Medicare and Medicaid Services. Ms. Cowan, a coauthor of an annual analysis of the nation's health spending, spoke at a briefing on the report.

Nursing home prices dropped; spending still grew 3.5% in 2006, less than the almost 5% increase in 2005. Home health services grew almost 10% in 2006, down from a 12% increase in 2005.

Medicare spending increased 19% to $401 billion, driven largely by the prescription drug benefit, the administration cost for that benefit, and Medicare Advantage.

Overall drug spending grew 8.5% in 2006—an increase from the 5.8% rise in spending in 2005. Half of the 2006 increase was due to greater utilization, not surprising since about 23 million Medicare beneficiaries took advantage of the new benefit. Prescription prices increased by only a little over 3%, according to an annual analysis by actuaries at the Centers for Medicare and Medicaid Services.

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

Medicare spent $41 billion on Part D in 2006, with $35 billion for drug purchases and $6 billion for administration and “net cost of insurance”—the cost of subsidizing premiums for low-income beneficiaries and costs for transferring beneficiaries into private plans. Medicare paid for 18% of all retail drugs, versus only 2% in 2005. Medicare took on costs previously covered by private insurers, Medicaid, and the uninsured.

On average, each Part D enrollee received $1,700 in benefits, according to CMS.

Generics accounted for 63% of drugs dispensed in the U.S. in 2006, according to the report.

The largest category of spending is hospital care, which eats up 31% of U.S. health dollars.

Consumers Union: Private Insurers Are Gouging

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

Each month since December 2005, the consumer advocacy group has tracked the prices of five drugs commonly used by Medicare beneficiaries in a single ZIP code in each of five states—California, New York, Illinois, Florida, and Texas.

The data are taken directly from

Medicare.gov

Consumers Union Senior Policy Analyst Bill Vaughan said in an interview the group found that prices generally rise the most from December to January—after a beneficiary has locked into a plan for the upcoming year. The average increase for the five drugs as a package (Lipitor, Celebrex, Zoloft, nifedipine ER, and Altace) was $369 from December 2007 to January 2008, according to Consumers Union.

Mr. Vaughan also noted: “These continual price hikes are Exhibit A for Congress to give renewed attention to negotiating drug prices on behalf of America's taxpayers and seniors, and offering the option of a Medicare-run drug benefit.”

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

The median hospital cost per patient dropped by $1,000, and the median mortality dropped by 2%. The project has 250 participating hospitals, and more than 1 million patient records were analyzed.

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

At a briefing, Mark Wynn, Ph.D., director of payment policy demonstrations at CMS, said the project is one of the agency's primary arguments in favor of value-based purchasing, a policy CMS regards as the most effective way to reward efficiency and value. “Relatively modest dollars can have huge impacts,” he said.

Dr. Evan Benjamin, chief quality officer for Baystate Health System in Springfield, Mass., agreed. He was the lead author of a study looking at earlier data which found quality was higher among the 250 incentivized hospitals than it was in control hospitals that reported data publicly but were not given incentives (N. Engl. J. Med. 2007;356:486-96).

The demonstration project began in October 2003; data covered every quarter through June 2007.

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

Overall, hospitals improved by an average 17% on a composite quality score used by the project.

There was a continuing downward trend in performance variation among the hospitals, with all moving toward the ideal, said Richard Norling, president and CEO of Premier Inc. Costs and mortality were lowest for the hospitals that were on target 100% of the time with 100% of patients, he said.

For instance, the mortality for coronary artery bypass graft patients was close to 6% at hospitals that met appropriate care benchmarks in only half the patients or fewer. Mortality was just under 2% for facilities that met those benchmarks in 75%-100% of the patients, Mr. Norling told reporters.

Attaining the goals of the demonstration project required cultural shifts and investments in information systems. Before the project, the Aurora Health Care system was reactive and was achieving only incremental quality improvement, said Dr. Nick Turkal, president and CEO of the Milwaukee-based nonprofit system. The system's 13 hospitals have 100,000 admissions annually. Data on meeting the pay-for-performance goals are given to employees every 60 days, and are updated regularly on the system's Web site for the public to see. Mortality and costs are down significantly, but “we're not done yet,” he said.

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

The median hospital cost per patient dropped by $1,000, and the median mortality dropped by 2%. The project has 250 participating hospitals, and more than 1 million patient records were analyzed.

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

At a briefing, Mark Wynn, Ph.D., director of payment policy demonstrations at CMS, said the project is one of the agency's primary arguments in favor of value-based purchasing, a policy CMS regards as the most effective way to reward efficiency and value. “Relatively modest dollars can have huge impacts,” he said.

Dr. Evan Benjamin, chief quality officer for Baystate Health System in Springfield, Mass., agreed. He was the lead author of a study looking at earlier data which found quality was higher among the 250 incentivized hospitals than it was in control hospitals that reported data publicly but were not given incentives (N. Engl. J. Med. 2007;356:486-96).

The demonstration project began in October 2003; data covered every quarter through June 2007.

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

Overall, hospitals improved by an average 17% on a composite quality score used by the project.

There was a continuing downward trend in performance variation among the hospitals, with all moving toward the ideal, said Richard Norling, president and CEO of Premier Inc. Costs and mortality were lowest for the hospitals that were on target 100% of the time with 100% of patients, he said.

For instance, the mortality for coronary artery bypass graft patients was close to 6% at hospitals that met appropriate care benchmarks in only half the patients or fewer. Mortality was just under 2% for facilities that met those benchmarks in 75%-100% of the patients, Mr. Norling told reporters.

Attaining the goals of the demonstration project required cultural shifts and investments in information systems. Before the project, the Aurora Health Care system was reactive and was achieving only incremental quality improvement, said Dr. Nick Turkal, president and CEO of the Milwaukee-based nonprofit system. The system's 13 hospitals have 100,000 admissions annually. Data on meeting the pay-for-performance goals are given to employees every 60 days, and are updated regularly on the system's Web site for the public to see. Mortality and costs are down significantly, but “we're not done yet,” he said.

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

The median hospital cost per patient dropped by $1,000, and the median mortality dropped by 2%. The project has 250 participating hospitals, and more than 1 million patient records were analyzed.

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

At a briefing, Mark Wynn, Ph.D., director of payment policy demonstrations at CMS, said the project is one of the agency's primary arguments in favor of value-based purchasing, a policy CMS regards as the most effective way to reward efficiency and value. “Relatively modest dollars can have huge impacts,” he said.

Dr. Evan Benjamin, chief quality officer for Baystate Health System in Springfield, Mass., agreed. He was the lead author of a study looking at earlier data which found quality was higher among the 250 incentivized hospitals than it was in control hospitals that reported data publicly but were not given incentives (N. Engl. J. Med. 2007;356:486-96).

The demonstration project began in October 2003; data covered every quarter through June 2007.

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

Overall, hospitals improved by an average 17% on a composite quality score used by the project.

There was a continuing downward trend in performance variation among the hospitals, with all moving toward the ideal, said Richard Norling, president and CEO of Premier Inc. Costs and mortality were lowest for the hospitals that were on target 100% of the time with 100% of patients, he said.

For instance, the mortality for coronary artery bypass graft patients was close to 6% at hospitals that met appropriate care benchmarks in only half the patients or fewer. Mortality was just under 2% for facilities that met those benchmarks in 75%-100% of the patients, Mr. Norling told reporters.

Attaining the goals of the demonstration project required cultural shifts and investments in information systems. Before the project, the Aurora Health Care system was reactive and was achieving only incremental quality improvement, said Dr. Nick Turkal, president and CEO of the Milwaukee-based nonprofit system. The system's 13 hospitals have 100,000 admissions annually. Data on meeting the pay-for-performance goals are given to employees every 60 days, and are updated regularly on the system's Web site for the public to see. Mortality and costs are down significantly, but “we're not done yet,” he said.

WASHINGTON – Congress is taking a tough look at the use of human growth hormone for a wide variety of conditions, including fibromylagia, which is prompting some concern that payers may react by limiting reimbursement for legitimate purposes.

Human growth hormone (HGH) has been touted as an antiaging cure, and increasingly appears to be used by athletes of all ages in the belief that it helps them improve performance and recover from injuries faster. It has been legitimately studied for injury recovery in the elderly, and also is being investigated as a potential therapy for conditions such as fibromyalgia and chronic fatigue syndrome. But this field of inquiry is relatively new.

Insurers are already reluctant to cover scientifically validated uses of HGH, Dr. Richard Hellman, president of the American Association of Clinical Endocrinologists, said in an interview. The drug can cost $10,000-$20,000 a year. The continuing use for purposes that have little-to-no evidence of safety and effectiveness may ultimately endanger patients who genuinely need HGH, said Dr. Hellman, a clinical professor of medicine at the University of Missouri, Kansas City.

Congress is taking a closer look at HGH and other alleged performance-enhancing substances in the wake of the December report issued by former Sen. George Mitchell that exposed a culture of acceptance for off-label and unproven uses of HGH and anabolic steroids in Major League Baseball.

In mid-February, the House Committee on Oversight and Government Reform held a hearing on what it called “myths and facts” about HGH, vitamin B12, and other substances. The hearing was essentially a warm-up for subsequent panel meetings on the use of such substances in baseball and other professional sports that were scheduled for February, but it touched on issues of interest to physicians.

The hearing provided “an opportunity to provide essential and accurate information not just to professional athletes, but to high school kids, senior citizens, baby boomers turning 60, and everyone in between,” according to Rep. Henry Waxman (D-Calif.), chairman of the oversight committee.

All of these uses are illegal. HGH is the only Food and Drug Administration (FDA) approved product that can only be prescribed for the approved indications. In children, the approved indications are to treat: growth hormone deficiency, chronic kidney disease, Turner syndrome, small for gestational age infants who do not catch up to normal range, Prader-Willi syndrome, idiopathic short stature; SHOX gene haploinsufficiency, and Noonan syndrome. In adults, HGH is legal for AIDS-related wasting syndrome, short-bowel syndrome, and growth hormone deficiency.

Distribution of HGH, or possession with intent to distribute, for any off-label use is a felony, punishable with up to 5 years in prison and fines.

“Without question, those attempting to market or distribute HGH claiming it will aid healing, slow or reverse the aging process, assist in weight loss, or cure depression are scamming consumers and breaking the law,” warned Rep. Tom Davis (R-Va.), the oversight committee's ranking Republican member.

And yet, some estimate that illegal HGH sales far outweigh the sanctioned market. Dr. Thomas Perls told the House committee in February that anti-aging sales amount to $2 billion a year. “I personally have found Web sites of 279 antiaging clinics that advertise HGH treatment, and 26 pharmacies that distribute the drug to these clinics or sometimes directly to users,” said Dr. Perls of Boston University. “I have certainly discovered only a fraction of what exists out there,” he added.

In a JAMA article in 2005, Dr. Perls said that legal sales of HGH in 2004 amounted to about $622 million annually, for a little more than 200,000 initial and refill prescriptions, according to data from IMS Health, a market research company (JAMA 2005;294:2086-90).

Dr. Alan Rogol, a professor of clinical pediatrics at the University of Virginia, Charlottesville, also expressed dismay at the House hearing at what appears to be the growing misuse of HGH. Off-label use comes with increased risk of side effects such as acromegaly, and increased insulin resistance or diabetes, said Dr. Rogol. He also said that in many cases, HGH purchasers were getting something other than HGH. The prices being advertised are too low and, “many of these preparations are taken orally and cannot be the protein hormone HGH, for it is not active by this route,” said Dr. Rogol, who testified on behalf of the Endocrine Society.

Another potential danger is that many of the illicit sales are of human tissue-derived pituitary growth hormone, which has been removed from the market because it has the potential to contain the pathogen that causes Creutzfeldt-Jakob disease. And yet, some of this type of hormone is still available in Eastern Europe and through the Internet.

“It is my opinion for an adult there are no legitimate off-label uses,” Dr. Rogol emphasized in an interview.

But both Dr. Rogol and Dr. Hellman acknowledged that there are no central data on how much HGH is being used illicitly, by either nonphysician or physician prescribers. It's in the public interest to keep a registry or to create some other way to keep track of HGH use, Dr. Hellman said. Physicians legitimately using HGH “should have no problem having their work scrutinized,” he said.

Both endocrinologists also said they were open to considering data on new uses of HGH, as long as it came from a validated scientific process.

The Endocrine Society and AACE both have published guidelines on HGH. The Endocrine Society guidelines, published in 2006, only pertained to treating adult growth hormone deficiency (J. Clin. Endocrinol. Metab. 2006;91:1621-34).

AACE last published guidelines in 2003. That report took a broad look at HGH uses and highlighted concerns that off-label prescribing or abuse could lead to reimbursement issues for legitimate patients (Endocr. Pract. 2003;9:64-76).

WASHINGTON – Congress is taking a tough look at the use of human growth hormone for a wide variety of conditions, including fibromylagia, which is prompting some concern that payers may react by limiting reimbursement for legitimate purposes.

Human growth hormone (HGH) has been touted as an antiaging cure, and increasingly appears to be used by athletes of all ages in the belief that it helps them improve performance and recover from injuries faster. It has been legitimately studied for injury recovery in the elderly, and also is being investigated as a potential therapy for conditions such as fibromyalgia and chronic fatigue syndrome. But this field of inquiry is relatively new.

Insurers are already reluctant to cover scientifically validated uses of HGH, Dr. Richard Hellman, president of the American Association of Clinical Endocrinologists, said in an interview. The drug can cost $10,000-$20,000 a year. The continuing use for purposes that have little-to-no evidence of safety and effectiveness may ultimately endanger patients who genuinely need HGH, said Dr. Hellman, a clinical professor of medicine at the University of Missouri, Kansas City.

Congress is taking a closer look at HGH and other alleged performance-enhancing substances in the wake of the December report issued by former Sen. George Mitchell that exposed a culture of acceptance for off-label and unproven uses of HGH and anabolic steroids in Major League Baseball.

In mid-February, the House Committee on Oversight and Government Reform held a hearing on what it called “myths and facts” about HGH, vitamin B12, and other substances. The hearing was essentially a warm-up for subsequent panel meetings on the use of such substances in baseball and other professional sports that were scheduled for February, but it touched on issues of interest to physicians.

The hearing provided “an opportunity to provide essential and accurate information not just to professional athletes, but to high school kids, senior citizens, baby boomers turning 60, and everyone in between,” according to Rep. Henry Waxman (D-Calif.), chairman of the oversight committee.

All of these uses are illegal. HGH is the only Food and Drug Administration (FDA) approved product that can only be prescribed for the approved indications. In children, the approved indications are to treat: growth hormone deficiency, chronic kidney disease, Turner syndrome, small for gestational age infants who do not catch up to normal range, Prader-Willi syndrome, idiopathic short stature; SHOX gene haploinsufficiency, and Noonan syndrome. In adults, HGH is legal for AIDS-related wasting syndrome, short-bowel syndrome, and growth hormone deficiency.

Distribution of HGH, or possession with intent to distribute, for any off-label use is a felony, punishable with up to 5 years in prison and fines.

“Without question, those attempting to market or distribute HGH claiming it will aid healing, slow or reverse the aging process, assist in weight loss, or cure depression are scamming consumers and breaking the law,” warned Rep. Tom Davis (R-Va.), the oversight committee's ranking Republican member.

And yet, some estimate that illegal HGH sales far outweigh the sanctioned market. Dr. Thomas Perls told the House committee in February that anti-aging sales amount to $2 billion a year. “I personally have found Web sites of 279 antiaging clinics that advertise HGH treatment, and 26 pharmacies that distribute the drug to these clinics or sometimes directly to users,” said Dr. Perls of Boston University. “I have certainly discovered only a fraction of what exists out there,” he added.

In a JAMA article in 2005, Dr. Perls said that legal sales of HGH in 2004 amounted to about $622 million annually, for a little more than 200,000 initial and refill prescriptions, according to data from IMS Health, a market research company (JAMA 2005;294:2086-90).

Dr. Alan Rogol, a professor of clinical pediatrics at the University of Virginia, Charlottesville, also expressed dismay at the House hearing at what appears to be the growing misuse of HGH. Off-label use comes with increased risk of side effects such as acromegaly, and increased insulin resistance or diabetes, said Dr. Rogol. He also said that in many cases, HGH purchasers were getting something other than HGH. The prices being advertised are too low and, “many of these preparations are taken orally and cannot be the protein hormone HGH, for it is not active by this route,” said Dr. Rogol, who testified on behalf of the Endocrine Society.

Another potential danger is that many of the illicit sales are of human tissue-derived pituitary growth hormone, which has been removed from the market because it has the potential to contain the pathogen that causes Creutzfeldt-Jakob disease. And yet, some of this type of hormone is still available in Eastern Europe and through the Internet.

“It is my opinion for an adult there are no legitimate off-label uses,” Dr. Rogol emphasized in an interview.

But both Dr. Rogol and Dr. Hellman acknowledged that there are no central data on how much HGH is being used illicitly, by either nonphysician or physician prescribers. It's in the public interest to keep a registry or to create some other way to keep track of HGH use, Dr. Hellman said. Physicians legitimately using HGH “should have no problem having their work scrutinized,” he said.

Both endocrinologists also said they were open to considering data on new uses of HGH, as long as it came from a validated scientific process.

The Endocrine Society and AACE both have published guidelines on HGH. The Endocrine Society guidelines, published in 2006, only pertained to treating adult growth hormone deficiency (J. Clin. Endocrinol. Metab. 2006;91:1621-34).

AACE last published guidelines in 2003. That report took a broad look at HGH uses and highlighted concerns that off-label prescribing or abuse could lead to reimbursement issues for legitimate patients (Endocr. Pract. 2003;9:64-76).

WASHINGTON – Congress is taking a tough look at the use of human growth hormone for a wide variety of conditions, including fibromylagia, which is prompting some concern that payers may react by limiting reimbursement for legitimate purposes.

Human growth hormone (HGH) has been touted as an antiaging cure, and increasingly appears to be used by athletes of all ages in the belief that it helps them improve performance and recover from injuries faster. It has been legitimately studied for injury recovery in the elderly, and also is being investigated as a potential therapy for conditions such as fibromyalgia and chronic fatigue syndrome. But this field of inquiry is relatively new.

Insurers are already reluctant to cover scientifically validated uses of HGH, Dr. Richard Hellman, president of the American Association of Clinical Endocrinologists, said in an interview. The drug can cost $10,000-$20,000 a year. The continuing use for purposes that have little-to-no evidence of safety and effectiveness may ultimately endanger patients who genuinely need HGH, said Dr. Hellman, a clinical professor of medicine at the University of Missouri, Kansas City.

Congress is taking a closer look at HGH and other alleged performance-enhancing substances in the wake of the December report issued by former Sen. George Mitchell that exposed a culture of acceptance for off-label and unproven uses of HGH and anabolic steroids in Major League Baseball.

In mid-February, the House Committee on Oversight and Government Reform held a hearing on what it called “myths and facts” about HGH, vitamin B12, and other substances. The hearing was essentially a warm-up for subsequent panel meetings on the use of such substances in baseball and other professional sports that were scheduled for February, but it touched on issues of interest to physicians.

The hearing provided “an opportunity to provide essential and accurate information not just to professional athletes, but to high school kids, senior citizens, baby boomers turning 60, and everyone in between,” according to Rep. Henry Waxman (D-Calif.), chairman of the oversight committee.

All of these uses are illegal. HGH is the only Food and Drug Administration (FDA) approved product that can only be prescribed for the approved indications. In children, the approved indications are to treat: growth hormone deficiency, chronic kidney disease, Turner syndrome, small for gestational age infants who do not catch up to normal range, Prader-Willi syndrome, idiopathic short stature; SHOX gene haploinsufficiency, and Noonan syndrome. In adults, HGH is legal for AIDS-related wasting syndrome, short-bowel syndrome, and growth hormone deficiency.

Distribution of HGH, or possession with intent to distribute, for any off-label use is a felony, punishable with up to 5 years in prison and fines.

“Without question, those attempting to market or distribute HGH claiming it will aid healing, slow or reverse the aging process, assist in weight loss, or cure depression are scamming consumers and breaking the law,” warned Rep. Tom Davis (R-Va.), the oversight committee's ranking Republican member.

And yet, some estimate that illegal HGH sales far outweigh the sanctioned market. Dr. Thomas Perls told the House committee in February that anti-aging sales amount to $2 billion a year. “I personally have found Web sites of 279 antiaging clinics that advertise HGH treatment, and 26 pharmacies that distribute the drug to these clinics or sometimes directly to users,” said Dr. Perls of Boston University. “I have certainly discovered only a fraction of what exists out there,” he added.

In a JAMA article in 2005, Dr. Perls said that legal sales of HGH in 2004 amounted to about $622 million annually, for a little more than 200,000 initial and refill prescriptions, according to data from IMS Health, a market research company (JAMA 2005;294:2086-90).

Dr. Alan Rogol, a professor of clinical pediatrics at the University of Virginia, Charlottesville, also expressed dismay at the House hearing at what appears to be the growing misuse of HGH. Off-label use comes with increased risk of side effects such as acromegaly, and increased insulin resistance or diabetes, said Dr. Rogol. He also said that in many cases, HGH purchasers were getting something other than HGH. The prices being advertised are too low and, “many of these preparations are taken orally and cannot be the protein hormone HGH, for it is not active by this route,” said Dr. Rogol, who testified on behalf of the Endocrine Society.

Another potential danger is that many of the illicit sales are of human tissue-derived pituitary growth hormone, which has been removed from the market because it has the potential to contain the pathogen that causes Creutzfeldt-Jakob disease. And yet, some of this type of hormone is still available in Eastern Europe and through the Internet.

“It is my opinion for an adult there are no legitimate off-label uses,” Dr. Rogol emphasized in an interview.

But both Dr. Rogol and Dr. Hellman acknowledged that there are no central data on how much HGH is being used illicitly, by either nonphysician or physician prescribers. It's in the public interest to keep a registry or to create some other way to keep track of HGH use, Dr. Hellman said. Physicians legitimately using HGH “should have no problem having their work scrutinized,” he said.

Both endocrinologists also said they were open to considering data on new uses of HGH, as long as it came from a validated scientific process.

The Endocrine Society and AACE both have published guidelines on HGH. The Endocrine Society guidelines, published in 2006, only pertained to treating adult growth hormone deficiency (J. Clin. Endocrinol. Metab. 2006;91:1621-34).

AACE last published guidelines in 2003. That report took a broad look at HGH uses and highlighted concerns that off-label prescribing or abuse could lead to reimbursement issues for legitimate patients (Endocr. Pract. 2003;9:64-76).

CMS Mulls Carotid Stent Change

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

Artificial Heart Coverage Proposed

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

Jarvik Lipitor Ad Pulled

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

ACC on Vytorin Queries

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

Don't Blame Technology for Costs

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

Pay for Remote Monitoring

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

CMS Mulls Carotid Stent Change

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

Artificial Heart Coverage Proposed

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

Jarvik Lipitor Ad Pulled

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

ACC on Vytorin Queries

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

Don't Blame Technology for Costs

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

Pay for Remote Monitoring

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

CMS Mulls Carotid Stent Change

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

Artificial Heart Coverage Proposed

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

Jarvik Lipitor Ad Pulled

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

ACC on Vytorin Queries

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

Don't Blame Technology for Costs

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

Pay for Remote Monitoring

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

NIMH Budget Woes

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

Mo. Psychologists Eye Prescribing

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

Heart-Brain Link Overlooked

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

Ecstasy Use Continues to Rise

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

Medication Errors Hit 1 in 10

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

Top 10 Cost Half a Trillion

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

NIMH Budget Woes

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

Mo. Psychologists Eye Prescribing

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

Heart-Brain Link Overlooked

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

Ecstasy Use Continues to Rise

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

Medication Errors Hit 1 in 10

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

Top 10 Cost Half a Trillion

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

NIMH Budget Woes

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

Mo. Psychologists Eye Prescribing

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

Heart-Brain Link Overlooked

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

Ecstasy Use Continues to Rise

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

Medication Errors Hit 1 in 10

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

Top 10 Cost Half a Trillion

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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