Archive for June, 2009

Healthy Lifestyles are so Yesterday

June 30th, 2009 | No Comments | Source: Am. J. Medicine, MedPageToday

The number of Americans that adhere to a healthy lifestyle has plummeted 46% in the last 20 years, according to scientists at the Medical University of South Carolina. 

notanotherlenorerunJust 8% of adults between the ages of 40-74 practice all 5 of the following behaviors: exercising, eating fruits and vegetables, maintaining a healthy weight, drinking alcohol in moderation and not smoking.

That number was 15% in 1988, according to Dana King and colleagues, who published the distressing findings in the American Journal of Medicine.

“These findings should provide new motivation for an increasing commitment to promoting healthy lifestyles for the public good,” the researchers told MedPageToday.

To reach their conclusions, the scientists pulled data from the National Health and Nutrition Examination Survey (NHANES), which uses self-reported data on such behavior.

Over the 18 year study period, the percentage of adults classified as obese, which is to say having a BMI of 30 or above, rose from 28% to 36%.

The proportion adults that exercised at least 12 times per month dropped from 53% to 43% while those eating 5 daily servings of fruits and vegetables dropped from a hard-to-believe 42% to 26%.

Smoking rates remained at 26.5%.

Non-Hispanic whites exhibited the steepest declines in overall healthy behaviors, and those with cardiovascular disease, high blood pressure and diabetes were not more likely than others to adhere to recommendations for a healthy lifestyle.

The scientists suggested that increased reliance on cars as well as changes in attitudes about the importance of diet and exercise might be driving the numbers.

I'llbewatchin'youHealth care costs will surely continue upward and hard-earned gains in longevity will be reversed ”if middle-aged adults do not increasingly adopt a healthy lifestyle as the primary approach to prevention and treatment of hypertension, diabetes, and hyperlipidemia,” they warned.

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Web Mucking up Education

June 30th, 2009 | No Comments | Source: NY Times

There once was a time when college students asked classmates or TAs for help when it came time to prepare for exams.

Now it seems, these tried and true resources have been replaced by Web sites which offer answers to textbook problems, copies of old exams, lecture notes, and on-line help from paid experts among other things.

maybeillcheckoutcoursehero“Many professors won’t tell you how you got (something) wrong — just that it’s wrong. This way you complete the feedback process, which is essential to learning,” Columbia sophomore Chris O’Connor explained to the New York Times.

On Course Hero for example, students can access 3 million student-submitted items from 400,000 courses at more than 3,500 schools, including study guides, lecture notes, lab results, presentations, essays, research papers, and homework assignments.

Those who submit the goods can navigate Course Hero for free. Everyone else forks over a monthly fee. The site has several hundred thousand users.

On Cramster, 500,000 visitors have sought answers to science and math textbook problems. Answers to odd-numbered problems are free, but for those particularly tricky even-numbered problems, students must pay $9.95 per month.

Advocates for the Web sites, which include some professors, argue that many documents housed on the sites have been accessible to fraternity and sorority members since Animal House.

cramsterrip-offDavid Sachs, an associate dean at Pace University who has joined Cramster’s advisory panel, argues that “if Cramster and all these companies disappeared tomorrow, you could still do a Google search and find what you’re looking for in 5 minutes.”

And William Kinney, a Physics professor at SUNY Buffalo believes the system is “self-policing.” “If the students just copy down answers to the homework, they will not do well on the exam,” he told the Times.

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Lantus in Possible Link to Cancer

June 29th, 2009 | No Comments | Source: Wall Street Journal

hotlantusStudies from Germany, Sweden and Scotland, published last Friday in Diabetologia, suggest a “possible link” between the use of Lantus insulin and cancer.

The findings prompted the European Association for the Study of Diabetes to make an urgent call for additional research into the association.

The EASD added that patients who are presently taking the relatively new, synthetic insulin should continue to do so, although some might wish to consider alternative types of insulin.

Human insulin, the older form of the hormone, has been used for decades. Its safety is beyond doubt, according to the EASD. Lantus has been used widely, but only since 2000.

whatamessThe German study looked at an insurance database containing information regarding 127,000 insulin-treated patients. Scientists found that patients who had used Lantus were more likely to be diagnosed with cancer, and the effect was dose-dependent.

Thus, in patients receiving a dose of 10u, patients taking Lantus had cancer rates that were 9% higher than those taking human insulin. For those receiving 50u, the increased risk associated with Lantus was 31%.
 
Diabetologia editor Edwin Gale and EASD president Ulf Smith had become aware of the German findings awhile ago, according to an EASD press release. They decided to seek confirmatory evidence prior to announcing them formally.

As a result, similar database-driven studies were carried out in Sweden, Scotland, and the UK.

The Swedish study showed that patients taking Lantus insulin alone had twice the risk of breast cancer. The Scottish study revealed a statistically insignificant increased risk for breast cancer. The UK study was entirely negative.

Gale and Smith, in their press release, emphasize that all the studies have important methodological limitations.

In particular, patients taking Lantus insulin tended to be older, more obese and to have higher blood pressure than those receiving other forms of insulin. These pre-treatment differences could by themselves explain any differences in cancer rates between the groups. (more…)

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Russia Bails out Nesting Dolls

June 29th, 2009 | No Comments | Source: Washington Post

let'sbuythese!Things aren’t so good these days in Sergiyev Posad, the small town in northeastern Russia that is generally considered to be the birthplace of the matryoshka, the iconic nesting dolls that represent Russian folk culture and a simpler time, generally.

The wooden, black lacquered dolls that come in sets with each one fitting just so inside the next have become an endangered species, squeezed as they have been off vendors’ shelves by cheap plastic knock-offs from Asia and now threatened by the global economic slowdown.

The dolls are produced by hand in small factories or in  workshops by artisans that have spent years learning to use a lathe.

no,these!“The matryoshka is our face” to the world, Galina Subbota, the town’s deputy mayor told the Washington Post. “Even if it is not economically profitable, we can’t allow it to disappear from our lives.”

But in the setting of the Great Economic Crisis, souvenir shops have slashed orders and the tourists have all but vanished. Recently, nesting doll producers approached Moscow for financial aid which is necessary, they say, to save the industry from extinction.

In response, the Kremlin pledged to buy nearly $30 million worth of the dolls and began requiring  officials to distribute them as gifts.

buttheseareonsale!But the artisans view the largesse with skepticism and have indicated they would prefer that Moscow cut export taxes and make it easier for them to obtain existing subsidies.

“For 12 years, I’ve heard the government talking about support for folk crafts,” Oleg Korotkov told the Post. The director of Semyonovskaya Painting, a nesting doll manufacturer that has seen sales drop more than 90% added, “unfortunately, there’s never any real help.”

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China’s Thought Police at it Again

June 26th, 2009 | No Comments | Source: Wall Street Journal, Washington Post

Chinese officials have announced that beginning on July 1, all computers sold there must include government-designed software that blocks pornography.

theworldaccordingtochinaOK fine, but a few Internet savants smelled a rat and set out to test the so-called Green Dam-Youth Escort software.

Their conclusion: Green Dam also censors religious and anti-government Web sites, disables programs after people input certain words, monitors personal communications, and tracks the Internet explorations of Chinese citizens, according to the Wall Street Journal’s Gordon Krovitz.

China is in effect asking computer makers to help block access to information and punish citizens if they visit unsavory sites or express themselves freely online.

Green Dam, dubbed derisively by its own citizens as the “Great Firewall of China,” has also been found to close computer applications without warning and create serious security problems.

So far Dell, HP, Apple and Lenovo—whose biggest shareholder is China’s government—have tread lightly around the subject, allowing their trade associations to gently press the matter with Beijing.

But now, US Trade Representative Ron Kirk and Commerce Secretary Gary Locke have begun quietly pressuring China to shelve the program altogether. They claim the program may violate commitments that China made to the World Trade Organization.

In letters to 2 Chinese ministries yesterday, the US officials said, “China is putting companies at an untenable position by requiring them, with virtually no public notice, to pre-install software that appears to have broad-based censorship implications and network security issues.”

The letters encouraged China to seek ways to promote parental control without restricting freedom to roam the Internet, freedom of expression and the free flow of information, according to the Washington Post.

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Cutting Health Care Costs

June 26th, 2009 | No Comments | Source: Washington Post

Since forever, the Big O has argued that comprehensive health reform was a prerequisite to revivifying the nation’s flagging economy.

IjustfoundatrilliondollarsLast week, his argument got support from a report by the Council of Economic Advisors, which claimed that cutting annual growth in health-care spending from 6% to 4.5% could create 500,000 jobs per year and increase annual family income by $2,600 over the next decade.

Alas, the report lacked details regarding how such goals would be met, and failed to mention the extra dollar or two in government spending that would be needed to jump-start the process.

The report also acknowledged that the 25% reduction in the rate of growth in spending was “near the upper bound of what is feasible.”

Republicans and independent analysts were deeply critical of the report, decrying in particular the assumption that a broad expansion of health insurance could translate into long-term savings for the government and the economy as a whole.

“This report is nothing more than smoke and mirrors,” seethed House Minority Leader John Boehner to the Washington Post. “The administration hasn’t offered a credible plan to (cut costs) without raising taxes or rationing care.”

Nevertheless, the Unflappable One pushed onward, releasing the contents of a letter from a consortium of industry stakeholders that promised to help save money over the next decade. 

In it, American Hospital Association pledged to fight nosocomial infections and readmissions. The AMA said it would coax physicians to follow evidence-based guidelines for back pain, heart disease and prenatal care. Big Pharma said that starting drugs earlier in the course of certain illnesses could reduce the need for more costly interventions later on.

One can only wonder why these obviously good ideas weren’t implemented long ago.

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Big O Bobs, Weaves on Public Plan

June 25th, 2009 | No Comments | Source: NY Times

floatslikebutterfly

This post first appeared on the Practice Fusion Blog.

During Tuesday’s press frolic, the Big O put some mustard on his pitch for a public option, dismissing as “not logical” suggestions that a government plan would sink Big Insurance faster than the Titanic.

He followed quickly with a favorite refrain, which is that good, old-fashioned competition from a public plan would be an “important tool to discipline insurance companies.”

Then, in a denouement worthy of at least runner up at a Harvard Law Debate Club, he triple-dog-dared anyone to come up with a better plan that met his 2 etched-in-stone requirements. “Reform has to control costs and it has to provide relief to people who don’t have health insurance or are underinsured,” he said.

smokinjoeBig Insurance, destined in this match to play Smokin’ Joe to the Big O’s Ali, released a wild haymaker of its own 2 hours before the Big O even showed up.

“We do not believe it is possible to create a government plan that could operate on a level playing field,” quoth Karen Ignagni, president of America’s Health Insurance Plans, and Scott Serota, president of the Blue Cross and Blue Shield Association in an open letter to the Senate.

“Regardless of how it is initially structured, a government plan would use its built-in advantages to take over the health insurance market,” the letter continued.

No doubt the Big O smirked when he read that.

Meanwhile, Kent Conrad, the intrepid Senator from North Dakota has created a stir with his suggestion that nonprofit consumer-owned cooperatives could be an alternative to the government plan.

He foresees the Feds forking over $3-4 billion to jumpstart the co-ops, after which time they would sink or swim on premiums and investment income, just like Big Insurance.

The Big O knows he can live with this or any approach that covers most everybody without breaking the bank, but on this day he was playing offense.

spock“If private insurers say that the marketplace provides the best quality health care, if they tell us that they’re offering a good deal, then why is it that the government — which they say can’t run anything — suddenly is going to drive them out of business?” Obama asked.

Mr. Spock himself couldn’t have asked a more logical question.

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Bay State Pulling Back on Coverage

June 25th, 2009 | No Comments | Source: Boston Globe

In 2006, Massachusetts enacted a law requiring that all residents obtain health insurance.

Ever since, developments there have been watched closely since what happens in the state might play out nationally should the Great American Health Care Do-Over include an individual mandate.

notenoughdoughUnfortunately, the Bay State’s program has been plagued by unsustainable cost escalations since Day 1, and the situation has been exacerbated recently by recession-related budget shortfalls and rising unemployment.

It was a matter of time before cuts had to be made, and that happened yesterday when state policymakers announced they’re cutting $115 million, or 12% from the budget of Commonwealth Care, a centerpiece of the state’s initiative which subsidizes premiums for poor residents.

The cuts amount to a forced slowdown in Commonwealth Care enrollment. According to the Boston Globe, about 18,000 residents who qualify for subsidies but who have not designated a health plan will no longer be automatically enrolled in program.

whyisthismansmiling?Tentative cuts in dental coverage for 92,000 Commonwealth Care enrollees and health insurance for 28,000 legal immigrants have also been proposed, although these proposals  must be approved by governor Deval Patrick.

He has until Monday to decide.

Commonwealth Care currently has 177,000 members. It’s projected to have 212,000 by year end, 2010.

“No decision has been made’’ on the immigrant coverage issue, Leslie Kirwan, Patrick’s secretary of administration and finance told the Globe. “It’s certainly going to be at the top of the list’’ of items Patrick might restore to the budget, she added.

Leaders of Health Care for All, a Bay State consumer group, said the proposal would be tough on non-English-speaking residents who find it hard to navigate the complex enrollment process for Commonwealth Care.

“My concern is people will not get the care they need,’’ lamented the group’s representative, Lindsey Tucker to the Globe.

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Cancer Gene Patents

June 24th, 2009 | No Comments | Source: NY Times

After being diagnosed with breast cancer 3 years ago, Genae Girard knew she faced medical travails and steep costs, but she didn’t necessarily expect to encounter a patent problem.

Still, that’s what happened after the 39 year-old Austin, Texas native underwent BRCA gene testing to determine whether she was at increased risk for ovarian cancer, perhaps necessitating that her ovaries be removed as well.

The test was positive.

myriadmonopolistsShe requested confirmation using another test, but was stoned by a decade-old Patent Office ruling that granted Myriad Genetics a patent on BRCA genes and the related testing procedures that determine ovarian cancer risk.

Now Girard is suing Myriad and the Patent Office. She has been joined by other cancer patients, professional organizations representing 100,000 pathologists, and a raft of genetic researchers. The ACLU organized the case and filed it in a federal court in New York. 

The coalition does not plan to accuse Myriad of being a poor steward of the information concerning the BRCA genes, but rather that BRCA testing could improve and costs could be reduced in the absence the monopoly held by Myriad as a result of the Patent Office’s decision.

patentcasetooclosetocall“With a sole provider, there’s mediocrity,” Wendy Chung told the New York Times. Chung is a plaintiff in the case and directs clinical genetics at Columbia.

Companies like Myriad have contended in similar cases that the patent system fosters innovation by rewarding risky investments in research and development.

The Patent Office has already granted patents to single companies for genetic testing on long QT syndrome, a condition associated with cardiac arrhythmias and sudden death, and testing for the gene that causes hemochromatosis, a rare condition characterized by excessive iron accumulation.

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Clovis Comes out Swingin’

June 24th, 2009 | No Comments | Source: BurrillReport

What recession?

Clovis Pharmaceuticals, a Boulder-based start-up bred to acquire, develop and commercialize oncology products, has just raised $145 million, the largest such financing this year.

ClovisbusinessstrategyClovis’ management team is the same one that grew Pharmion into a colossus that was snapped up by Celgene in 2008 for $2.9 billion.

Its financing comes from essentially the same VCs that backed Pharmion.
 
The timing of Clovis’ big raise is no accident. The Great Economic Crisis has left hundreds of Biotech companies in possession of promising molecules and not enough cash to develop them. Clovis, arguably, has its pick of the litter. 
 
“There’s a significant need for this type of company in almost any financial circumstance because the discovery abilities of our industry have really exceeded the development capacity of our industry,” Patrick Mahaffy, president and CEO of Clovis told BurrillReport.

“We (are) well capitalized…and many other companies are struggling…companies that may have wanted to be or had been an acquirer, or buyer, or partner of rights, have backed away,” he summarized.
 
Versant Ventures participated in the financing. For its managing director, Brian Atwood, the real appeal in the deal was Clovis’ management team, with which he worked as a Pharmion investor. “The guiding principle…for our firm is to find great management teams,” he confirmed.
 
Accompanying Versant in the round are Domain Associates, New Enterprise Associates, Aberdare Ventures, ProQuest Investments, Abingworth and Frazier Healthcare Ventures. All but the latter had invested in Pharmion.

Accompanying Mahaffy at Clovis will be CMO Andrew Allen, EVP of Regulatory Affairs and Technical Operations Gillian Ivers-Read, and CFO Erle Mast. All are reprising their roles at Pharmion, which Mahaffy founded 9 years ago. 

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Iran’s Mullahs Strangle the Internet

June 23rd, 2009 | No Comments | Source: Wall Street Journal

As part of its crackdown on free speech following last week’s rigged elections, Iran’s government is exerting unprecedented control over the country’s Internet communications. And to do that, it’s using products supplied by European companies.

Based on interviews with technology experts inside and outside Iran, the Wall Street Journal reported yesterday that those pesky mullahs are carrying out deep packet inspection on a massive scale.

In addition to blocking or slowing Internet communication, deep packet inspection gathers information about users and can be used to alter the content of the communication itself—changing a “yes” to a “no,” for example—which may be more disruptive than shutting off Internet communication altogether.

The nefarious capabilities are there for the mullahs to use, courtesy of a JV between the German multinational, Siemens, and Nokia, a Finnish mobile phone provider.

According to spokesperson Ben Roome, the company installed a “monitoring center” within the Iran’s government-run telecom monopoly as part of a larger gig that included the installation of mobile-phone networks.

“If you sell networks, you also, intrinsically, sell the capability to intercept any communication that runs over them,” Roome told the Journal.

The Iranian government had briefly experimented with the Big Brother-like equipment in the run-up to last week’s travesty, but few people fully understood the system’s capabilities until its powers were unleashed in the face of escalating street protests.

Deep packet inspection involves the deconstruction and subsequent reconstitution of Internet data including email, Internet phone calls, and images and messages sent via social-networking sites like Twitter and Facebook.

It could explain why the mullahs allowed Iran’s Internet to function rather than shutting it down altogether, and why it has been running at glacial speed since things started getting out of hand.

Iran is “now drilling into what the population is trying to say,” Marshal8e6 director of technical strategy Bradley Anstis told the Journal. “This looks like a step beyond what any other country is doing, including China.”

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Stem Cellers Threatened

June 23rd, 2009 | No Comments | Source: Washington Post

When the Big O lifted the curtain on federal funding for embryonic stem cell research in March, scientists applauded the move as a long-overdue boost for the promising field.

greenbaypackerstemcellsNow, these same scientists worry his plan may have the unintended effect of dampening progress by forcing researchers to comply with ethical standards that were enacted after their research began.

“We’re very concerned,” Amy Rick, chief executive of the Coalition for the Advancement of Medical Research told the Washington Post. “If they don’t change this, very little current research would be eligible. It’s a huge issue.”

Ongoing stem cell research has already passed ethical scrutiny, but when Obama lifted the ban, he charged the NIH to develop new guidelines governing the field. Those guidelines would be difficult to meet in retrospect.

This is essentially moving the goal post,” the Harvard Stem Cell Institute’s George Daley told the Post.

For example, the new NIH guidelines require that couples sign documents stating that they agree to donate their embryos for research and that they have been informed about other options like donating the embryos to other couples instead.

Many clinics did just this, but their consent forms did not necessarily specify as such.

No one knows how many stem cell lines would be affected by retrospective enforcement of the NIH guidelines, but experts believe most would not pass muster.

The NIH has a chance to clean up the mess when it releases the final version of its guidelines on or before July 7. 

“We know issues like this have been raised, and we will take them into consideration,” Raynard Kington, the NIH’s acting director told the Post. “The intent of the president was to expand opportunities and research in this area.”

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Drug Czars Draw Scabbards

June 22nd, 2009 | No Comments | Source: Wall Street Journal

To determine whether Big Pharma’s $80 billion contribution to the Big O’s health reform movement represents a magnanimous gesture or a negotiation ploy designed to save $20 billion, it’s worth taking a moment to review pertinent history.

wolfinsheep'sclothesSixteen years ago, the pharmaceutical industry teamed up with Big Insurance and providers to sink HillaryCare.

This time ‘round, it has chosen to defend its interests by sitting at the table, in part because that’s what  everyone else did.

Its interests are to maintain drug prices and profit, which means insurers and providers would be left to take the cost-reduction hit.

Big Pharma loves the idea of universal health coverage, since enabling the uninsured to gain access to its products will increase sales by some $18 billion per year.

It’s also a fan of payment schemes that foster disease prevention, since they pump up sales of its cardiac and diabetes drugs.

Big Pharma has spent lavishly to push this agenda. Company disclosure reports reveal it poured $47.4 million into lobbying efforts in Q1, 2009 alone, up 36% from last year.

AZ Chief Executive David Brennan told the Wall Street Journal that since prescription drugs account for “just about 10% of the overall cost” of US spending health care, the cost cutters ought to look elsewhere.

Pfizer Chief Executive Jeffrey Kindler’s against a Medicare-like public insurance plan that would enact “price controls” on drugs, robbing the industry of just rewards for the risk associated with drug development.

Meanwhile, the industry has bumped prices on many drugs more than 15% in the last quarter, according to data from Credit Suisse, in all likelihood to squeeze out every penny from its pills before its patents perish and policymakers pare prices.

Still, Big O spokesperson Linda Douglass praised the industry for playing in the band. Big Pharma is “agreeing we can no longer live with the status quo. It wasn’t that way 15 years ago,” she reasoned.

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Big Pharma to Cough up $80b

June 22nd, 2009 | No Comments | Source: Washington Post

The Pharmaceutical Research and Manufacturers of America (PhRMA) has agreed to cut prices on drugs purchased by Medicare in a symbolic gesture designed to show support for the Big O’s scheme to overhaul America’s Rube Goldberg health system.

chumpchangeIn effect, Big Pharma is pledging to cut $80 billion off its charges to the Feds over the next 10 years, according to a Washington Post post source who requested anonymity. 

“We applaud the president’s efforts on health care reform and are pleased to participate to expand access to medicines to seniors and disabled persons,” Kevin Sharer told the Post. Sharer was the chairman of PhRMA before becoming CEO at Amgen.

The proposal would affect 3.4 million elderly and disabled Americans that fall into the “doughnut hole,” a coverage gap in which Medicare patients end up paying the sticker price for brand-name drugs after incurring $2,200 in partially subsidized drug costs and before reaching a $5,100 outer limit, at which point the subsidies kick-in once again.

The proposal is that Big Pharma will offer 50% discounts to Medicare recipients that have fallen into the “doughnut hole,” and throw in some perks to bring the total cuts to $80 billion.

“This is real money on the table,” the source told the Post.

Big Pharma’s offer leaves the Big O to find another $920 billion to pay for the cost of the overhaul. Apparently he has made some serious coin in this regard by ordering inspections of the couches occupied by foreign dignitaries during White House visits.

Obama had hoped to snag $100 billion from Big Pharma, and some insiders feel the latter’s $80 billion offer amounted to a public negotiation ploy designed to save the industry the difference. 

“There was a great deal of sticker shock” regarding the $100 billion proposal, according to a Big Pharma executive who also spoke on conditions of anonymity.

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Billing Costs a Fortune

June 19th, 2009 | No Comments | Source: Healthcareitnews

Everyone knew the US’ Rube Goldberg healthcare system was plagued by high costs for billing- and insurance- related activities, but few would have believed it was this bad.

todaysbillsA recently concluded 3-year study of the matter has revealed that administrative (non-physician) costs associated with these 2 activities add up to $51,221 per FTE physician per year.

That’s not including the astonishing $34,052 per year per FTE physician to account for the physician’s own time spent on billing and insurance.

Summing the 2 brings the annual spend on these activities to $85,273 per FTE physician, or 10% of the total operating revenue for an average practice.

Approximately 0.67 FTE non-clinical personnel per FTE physician is allocated to billing and insurance, according to the study.

To reach their conclusions, Julie Sakowski and colleagues at the Sutter Health Institute interviewed business office personnel, observed office work flows, conducted budget and expense reviews and implemented a survey to assess clinician time spent on billing and insurance.

The study was funded by the Commonwealth Fund and the Robert Wood Johnson Foundation.

In a separate study just released by the Medical Group Management Association, investigators found that physicians spend about 43 minutes per workday interacting with insurance plans.

MGMA estimated that system-wide, overall staff time spent on insurance matters alone equaled $21-$31 billion per year, or $68,000 per physician per year, a number that can be reconciled with results from the above-mentioned Commonwealth Fund study.

“Minimizing billing and insurance-related activities is not the only goal of (health system) reform, (but) standardizing health plan features and processing requirements presents a tremendous opportunity for improving efficiency in a multi-payer health care system,” Sakowski told HealthCareITnews.

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Senate Draft Ices Public Option

June 19th, 2009 | No Comments | Source: Washington Post

The Senate Finance Committee has circulated a draft health reform proposal that features an individual mandate, authorizes an expansion of Medicaid, and–hold the presses!–dumps the Big O’s pet project, a government-sponsored plan that would compete with Big Insurance.

FinanceCommittee'scoldshouldertoBigOThe draft also includes scaled-back coverage provisions that limit costs associated with the overhaul.

One such provision cuts the number of middle-class folks that would qualify for tax credits designed to render insurance more affordable.

The Big O, HHS Secretary Kathleen Sebelius, and many House Democrats including Nancy Pelosi favor a public option to keep Big Insurance honest. Senate Democrats have been divided on the issue since Day 1.

In lieu of a public option, the draft proposes consumer-owned cooperatives similar in design to rural telecom and electricity providers. They would be “subject to government oversight and funded with federal seed money,” according to the Washington Post.

Meanwhile, House Democrats are divining ways to pay for the overhaul. They’re considering a Robin Hood tax on the rich, increased payroll taxes on employees, sin taxes on sugary drinks and alcohol, and a new value-added tax.

The House is also considering the Senate’s preferred approach to paying for reform, which is to tax health benefits received by Americans through their employers, as well as the Big O’s idea to limit itemized deductions for the rich.

A particularly controversial issue, according to the Post, is the extent to which employers must subsidize public coverage for employees if they don’t offer coverage to employees themselves.

People worry that if lawmakers don’t get this right, employees will flee to federal plans and send government costs through the roof.

The draft includes preliminary proposals for handling this nightmare.

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