• Balkin v. Somin, + Mariner on ACA cases

    A well-done video by NEJM (15 minutes), Jack Balkin (Yale) v. Ilya Somin (George Mason) on the constitutionality of the ACA, moderated by Wendy Mariner (BU).

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  • Conflicts of interest in medicine

    I’m at the ASLME “Conflicts of Interest in the Practice of Medicine: A National Symposium.” (agenda here) This one-and-a-half day conference has featured an array of recognized national experts who will discuss, debate, and propose best practices and approaches to the problem of conflicts of interest, including Robert Steinbrook (former deputy editor, NEJM) and Bernard Lo (who chaired the IOM panel).

    Many terrific presentations, but I want to focus on Sunita Sah, a post-doc at Duke and a research fellow at the Harvard Safra Center. Conventional wisdom assumes that disclosure of financial conflicts of interest in medicine is generally a good thing. Her experimental work questions these assumptions.

    One hypothesis is that medical residents may accept gifts because they feel entitled in light of the sacrifice and hardship of medical school. Three questions were used in different order to create a “sacrifice reminder” survey, a “suggested rationalization” survey and a control group survey which asked the question about the acceptability of gifts from industry before asking questions about sacrifices or suggesting a rationalization. The results were interesting, but might be a tool for drug companies to increase their influence through rationalization about sacrifice:

    Results Reminding physicians of sacrifices made in obtaining their education resulted in gifts being evaluated as more acceptable: 21.7% (13/60) in the control group vs 47.5% (57/120) in the sacrifice reminders group (odds ratio, 1.81; 95% confidence interval, 1.27-2.58; P=.001). Although most residents disagreed with the suggested rationalization, exposure to it further increased the perceived acceptability of gifts to 60.3% (73/121) in that group (odds ratio relative to sacrifice reminders group, 1.45; 95% confidence interval, 1.22-1.72; P[1].001).

    Conclusions Providing resident physicians with reminders of sacrifices increased the perceived acceptability of industry-sponsored gifts. Including a rationalization statement further increased gift acceptability.”

    Sah S, Loewenstein G. Effect of Reminders of Personal Sacrifice and Suggested Rationalizations on Residents’ Self-Reported Willingness to Accept Gifts: A Randomized Trial. JAMA 2010;304:1204-1211.

    Sunita presented on a second study on unintended effects of disclosure.  Her study suggested that when physicians disclose conflicts to their patients directly, the patients are made uncomfortable and may compensate by being more likely to accept the advice.  (I’m looking for the citation)

    A third study looked at how physicians address bias depending on the audience.  From the abstract:

    Professionals often give advice to many anonymous people. For example, financial analysts give public recommendations to trade stock, and medical experts formulate clinical guidelines that affect many patients. Normatively, awareness of the advice-recipient’s identity should not influence the quality of advice, and when advice affects a larger number of people, if anything, greater care should be taken to ensure its accuracy. Yet, contrary to this logic and consistent with research on the identifiable victim effect, results from two experimental studies demonstrate that advisors confronting a financial conflict of interest give more biased advice to multiple than single recipients and to unidentified than identified single recipients. Increased intensity of feelings toward single identified recipients appears to drive this process; advisors experience more empathy and appear to have greater awareness and motivation to reduce bias in their advice when the recipient is single and identified.

    Sah S, Loewenstein G.  More Affected = More Neglected:  Amplification of Bias in Advice to the Unidentified and Many.  Soc. Psychological and Personality Sci 2011;xxx:xx.

    Aaron has written on conflict of interest at TIE

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  • Prof Tim Jost honored by IOM

    The IOM elected him as a member recently, the only lawyer elected this year. Many of you know him from his Health Affairs blog, but he’s written cogently on the financing and organization of health care for decades. Well-deserved.

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  • Sausage-making: America Invents Act, Sec. 37

    Last month, the NY Times’ Andrew Pollack tried valiantly to shine the light on some legislative sausage-making.  Congress was considering (and ultimately passed) legislation to fix a simple but hugely expensive patent filing error by law firm Wilmer Hale.  The patent belongs to The Medicines Company, for the drug bivalirudin (Angiomax).  Wilmer Hale filed the paperwork a day late, and it cost them a whopping $232 million – $18 million up front from the firm’s malpractice insurers and up to $214 million over time if the mistake allows generic entry in the US before June 15, 2015.  (Details on the Wilmer Hale settlement here).

    But Wilmer Hale dodged a bullet (American Lawyer coverage), and may avoid paying anything from their own pocket, due to helpful special interest legislation in Congress. Section 37 of the recently passed America Invents Act overlooks the late filing by Wilmer Hale and restores the patent, despite mounting attacks from unhappy members of Congress and the generic company APP Pharmaceuticals.  Ed Silverman at Pharmalot has a nice summary with links.


    • $232 million for a one-day mistake in filing must be a record settlement by a major US law firm.
    • How is it “innovative” to reward a patent filing error with a couple more years of patent life?
    • By delaying generic entry, Section 37 saved Wilmer Hale $218 million, with those funds coming from Medicare, Medicaid and private payers.
    • Wilmer Hale/The Medicines Company avoided a potential loss at the Court of Appeals because they had better lobbyists in Congress.
    • Lobbyist return on investment:  The Medicines Company paid the Ken Cunningham Group only $180,000 in 2010 and $40,000 in 2011 to get the provision inserted.  1000:1 ROI.
    • For my law students:  never, ever miss a filing deadline.  Better yet, file a day early.
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  • From #OccupyBoston

    Two interesting signs from the Boston encampment last week:

    On the second sign, some fact checking by one of my clever BU Law students:


    Fact check-  The Immigration Policy Center did a study that estimated that illegal immigrants paid $11.2 billion in taxes- $1.2 billion in personal income, $1.6 billion in property and $8.4 billion in sales tax.

    On the flip side, GE paid no federal income tax- it actually got a tax credit back, due to operating at a loss in the US (the profits it made were from overseas): CNN.

    I think it’s an interesting issue, but one editorial pointed out that GE’s figures were based on income tax, to the exclusion of sales tax and property tax (and probably other taxes, like environmental).  It’s hard to make a blanket claim that a Fortune 500 company just didn’t pay taxes.  The IRS is interested in collecting its due (see the millions of tax cases out there) and probably audits big companies like this, especially in a year when they don’t pay taxes.

    h/t to Courtney on the fact check

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  • Which ACO antitrust lobbyists won?

    The draft FTC/DOJ Joint Statement on ACO Antitrust Enforcement attracted 127 written comments by health system stakeholders and lobbyists (synonyms?). The new Final Joint Statement was released yesterday. Who won this battle? Let’s narrow our focus on comments by 3 big players: AHIP was concerned about provider market power against health plans and certainly didn’t want to see additional anti-competitive flexibilities (prior TIE health care antitrust coverage here, generally concerned about growing provider market power); MGMA , naturally, wanted fewer limits on medical group market power. AHA focused on procedural issues.

    Providers got 2 concessions, one major and one minor.  The latter is a very reasonable grandfather rule, extending the Joint Statement to groups formed before the passage of the ACA. The more important change was to eliminate any mandatory antitrust review as a part of the Medicare ACO process. This provision, similar in some ways to the Hart-Scott-Rodino Act (pre-merger notification to the FTC/DOJ), would have required many ACOs to pass mandatory antitrust review before ACO approval. In the new Final Joint Statement, all antitrust reviews are voluntary. This result generally tracks the AHA and MGMA comments. AHIP avoided any substantive relaxation in health care antitrust rules.

    In short, the providers failed to get any weakening of substantive antitrust rules, but obtained some procedural flexibility. Antitrust lawyers and economists will still have plenty of ACO work.

    In a completely unrelated development, Washington, D.C. is now the richest city in the USA.

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  • The Japanese model for cost containment

    My recent post on Japan drew quite a few skeptical comments, in addition to some supporting Japanese health care. Japan does indeed provide universal coverage through private plans at half the cost. Plus one of the very best life expectancies in the OECD.

    How? From the latest installment in The Lancet’s six-part series on the Japanese health system:

    Japan’s premier health accomplishment in the past 50 years is the achievement of good population health at low cost with increased equity between different population groups. Shibuya K, et al. Future of Japan’s system of good health at low cost with equity: beyond universal coverage. The Lancet 2011;378:1265-1273.

    Just look at the title of that article. US health policy can only dream about being so lucky. In the US we increasingly specify how care must be delivered:

    A concern about universal coverage is how to control health expenditures in a sustainable manner. Japan’s basic policy has been a combination of tight supply-side control for the conditions of payment with the fee schedule, with a laissez-faire approach to how services are delivered.

    Some of the comments claim “Japanese exceptionalism” often with cultural or genetic explanations. Another possibility is the Japanese produce health care more efficiently, like cars.

    Are they too frugal? Consider how they reimburse for drugs (WSJ) (h/t to Brad F):

    Part of the attraction: with Japan’s rapidly aging population—23% of which is 65 years or older, more than any developed country, according to data from the country’s health ministry—demand for health care is expected to grow substantially in coming years. Tokyo also has eased some of the barriers that used to frustrate foreign drug makers trying to introduce new medicines.

    Perhaps Tokyo’s most important move has been changing the way the national health plan reimburses for brand-name drugs. The government insurer has mandated that a branded drug’s price be cut every two years, usually by an average 4% to 7%, which industry officials say discourages the introduction of many new drugs. Last year, Japan started a pilot program to exempt certain innovative medicines from that requirement.

    Finally, remember Aaron’s famous cross-national comparison posts?  For technology access, Japan rated best in some categories and worst in others:

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  • Boston Globe does a good job on increasing Medicare age – media scorecard

    I occasionally critique newspapers that report on health policy topics, typically for failing to report on the major limitations of a new study or ignoring a significant body of research (examples here).

    Happy to report that Tracy Jan in the Boston Globe published an accurate and complete story today on why the hospital associations are lobbying for increasing the Medicare eligibility age from 65 to 67. TIE has covered this proposal extensively. It’s nice to see solid reporting on a complex topic.

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  • Massachusetts doctors using ACOs as an excuse to violate the Sherman Antitrust Act

    Independent physicians cannot jointly negotiate prices and contracts with health plans. But someone in Massachusetts wants to overturn state and federal antitrust laws so doctors can wring more money out of Blue Cross. Here’s the bill, H00279. Adding insult to injury, the bill purports to be:

    An Act to enable the formation of accountable care organizations

    Remember – ACOs don’t need relaxed antitrust rules (TIE)

    Organized medicine has tried to violate the Sherman Act for years: in the 1990s, the AMA tried to create special physician unions to stand up to health plans. Dozens of physician organizations have been sanctioned by the government for illegally fixing prices without proper financial or clinical integration.  One Supreme Court case example is Arizona v. Maricopa County Medical Society, 457 US 332 (1982). See my recent health care antitrust update for more examples.

    The Massachusetts bill asserts that health plan concentration has damaged competition. Just opening the most recent issue of Health Affairs brings this assertion into question.  Melnick GA, Shen YC, Wu VY. The Increased Concentration of Health Plan Markets Can Benefit Consumers Through Lower Hospital Prices; Laugesen MJ, Glied SA.  Higher Fees Paid To US Physicians Drive Higher Spending For Physician Services Compared To Other Countries.  (Both studies received grant support from RWJF).

    The specific legal tool is the “state action exemption” from antitrust laws. State monopolies in toll roads and sewage services are legal, so long as the State does it directly or supervises it closely.

    In H00279, the goal is to let independent physicians jointly negotiate with health plans under the supervision of the Attorney General:

    “It is the intention of the General Court [MA legislature] to authorize health care professionals to jointly negotiate with carriers and other purchasers of health care services, and to qualify such joint negotiations and related joint activities for the State-action exemption to the Federal antitrust laws through the articulated State policy and active supervision provided in this act…”  (at §2(14)).

    The FTC is currently fighting Georgia’s attempt to borrow the state-action exemption without adequate supervision in the Phoebe Putney case at the 11th Circuit.  In the proposed MA legislation, the AG is given oversight, but not much discretion to act in the public interest.  The deck is stacked against the AG in the bill, giving the physicians an easy litigation route to challenge state supervision.

    h/t to my student, Michael Rugnetta, who spotted the bill

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  • Upcoming events

    • Antimicrobial Resistance: Biology, Population Dynamics and Policy Options. Boston University, Oct. 3-4. This conference is convened by Marc Lipsitch from the Harvard Center for Communicable Disease Dynamics. The majority of the conference focuses on the science of resistance, but on Oct. 4, we will have a series of policy panels from 2-5 pm. Much of that policy work was funded by the Public Health Law Program at RWJF.  Registration is officially closed, but email Kevin if you really want to attend.
    • Conflicts of Interest in the Practice of Medicine: A National Symposium. Pittsburgh, Oct 27-28; sponsored by the American Society of Law, Medicine & Ethics and the Highmark Foundation. The conference hopes to identify “best practices” within medicine to address conflicts of interest. 
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