Pulmonary Disease Linked to Vaping

As of August 21, 153 cases of severe respiratory disease associated with vaping had been reported to the CDC mostly in adolescents and teens (1). Cases have been reported in 16 states including California and New Mexico. No specific cause has been identified although the available evidence does not suggest and infectious source. Many of the cases appear similar with tetrahydrocannabinol (THC) containing products often mixed with the vaping solution (2). Patients’ respiratory symptoms at presentation included cough, shortness of breath and fatigue that worsened over several days or weeks before hospital admission. Some patients also reported fever, chest pain, weight loss, nausea or diarrhea.  Chest radiographs have been reported to show bilateral opacities and CT chest scans have demonstrated diffuse ground-opacities, often with sub-pleural sparing. In some cases, patients experienced respiratory failure requiring mechanical ventilation but subsequently improved with treatment with corticosteroids.

The Arizona Department of Health issued a warning to the public yesterday. If a case is suspected, the Arizona Poison and Drug Information System should be contacted at 800-222-1222.

Richard A. Robbins, MD

Editor, SWJPCC

References

1. CDC. CDC, FDA, states continue to investigate severe pulmonary disease among people who use e-cigarettes. August 21, 2019. Available at: https://www.cdc.gov/media/releases/2019/s0821-cdc-fda-states-e-cigarettes.html (accessed 8/22/19).
2. CDC. CDC urges clinicians to report possible cases of unexplained vaping-associated pulmonary illness to their state/local health department. August 14, 2019. Available at: https://emergency.cdc.gov/newsletters/coca/081619.htm (accessed 8/22/19).

Cite as: Robbins RA. Pulmonary disease linked to vaping. Southwest J Pulm Crit Care. 2019;19(2):84. doi: https://doi.org/10.13175/swjpcc057-19 PDF 

CEO Compensation-One Reason Healthcare Costs So Much

The Southwestern states were well represented in the category of highest executive pay at non-profit healthcare organizations (1). Leading the way was Bernard Tyson, Chief Executive Officer (CEO) of Kaiser in California, who earned over $16 million in salary. Lloyd Dean, CEO of Dignity Health in San Francisco, and Peter Fine, CEO of Banner in Phoenix, also made the top ten at over $9 million and $8 million respectively. The top 10 are listed in Table 1 and the salaries of the top 50 were all over $4 million.

Table 1. Top 10 Healthcare Executives Salary (2017) (1).

However, the salary only tells part of the part of the story. Note that on the far right of Table 1 under the category of other compensation, are some exceedingly high percentages. Adding in other compensation generates the executive total compensation (Table 2).

Table 2. Top 10 Total Executive Compensation (2017) (1).

Please note that these are all not-for-profit corporations. Economists talk about the pay ratio between CEOs and employees. Comparing Peter Fine's $25+ million salary with the average primary care physician salary of $155,212, a group not generally considered to be undercompensated, which means Mr. Fine earns more in 2 days than a physician earns in a year (2). Fine earns about $164 for every $1 earned by a physician

The people responsible for Mr. Fine’s compensation at Banner and other healthcare organizations are the board of directors. At Banner this consists of 13 members and 2 physicians. The physicians are Ronald J. Creasman MD, a retired Gilbert, AZ pulmonologist, and John Koster MD, the retired CEO of Providence Health & Services in Renton, WA. The others are mostly current or retired corporate executives and many sit on multiple corporate boards.

Steffie Woolhandler, MD, cofounder of nonprofit Physicians for a National Health Program, describes CEO compensation as a misallocation of funds collected for medical services. Overly generous compensation for executives of healthcare organizations diverts resources that would be better spent on patients, Woolhandler told Medscape Medical News in an interview (3). "This is money that is being taken out of the healthcare system and handed over to CEOs. This is money that is not being spent on medications. It is not being spent on doctor visits," Woolhandler said. "It is not being spent on hospitalizations. It's just going in the pockets of these CEOs."

Modern Healthcare reported that the combined compensation for the 25 top paid executives of nonprofit health systems rose to $197.9 million in 2017 from $148.6 million in 2016 (1). That's a pay increase of 33% for top executives of nonprofits. In contrast, the average increase was just over 5% for physicians in 2016 and 2017 (3). The largest increase seen in 2017 for any specialty was 24% among plastic surgeons. On the other end of the spectrum, pediatricians reported an average salary decrease of 1% in 2017 (3). Annual gross income for registered nurses was essentially flat, with respondents reporting an average income of $81,000 in 2017 and $80,000 in 2016, according to the Medscape's 2018 RN/LPN Compensation Report (3).

Overly generous executive compensation can erode the public's trust in healthcare organizations, especially given the growing backlash against aggressive bill-collection tactics, said Martin Makary MD MPH of Johns Hopkins, an expert in healthcare finance (3). Makary questioned the argument that substantial pay packages and increases are needed to attract and keep the best executive talent. Hospitals would do well to consider higher pay for the people who care directly for patients, he said. "What about the talent on the frontline, nurses and doctors? What about the clinicians and the staff at the hospital? Don't we want the best bedside nurses?" Makary said. The compensation packages for executives leading large healthcare nonprofit organizations reflect the market power these systems possess, J. Michael McWilliams, MD, PhD, a professor of healthcare policy at Harvard Medical School, told Medscape Medical News in an email exchange (3).

The increase in healthcare costs has largely been fueled by administrative overhead which now consumes about 40% of the healthcare dollar (5). The excessive compensation packages for healthcare CEOs and the salaries of their underlings likely contribute to this rising administrative cost. These excessive costs also make accusations against physicians, nurses and other healthcare workers that their salaries are largely responsible for the increase in healthcare costs ring pretty hollow. In order to control costs, understanding where the money is spent is essential.

In 2016 the Arizona Hospital Executive Compensation Act limiting CEO compensation to $450,000/year was proposed (6). Although the act was later dropped from the ballot, a survey of Southwest Journal of Pulmonary and Critical Care readers showed that 83% supported the measure and 35% though limiting CEO pay would improve patient care. It seems astonishing that so called not-for-profit organizations pay CEOs this amount of compensation. All of the money earned by or donated to a not-for-profit organization should be used in pursuing the organization's objectives and keeping it running. CEO compensation in the millions does not seem to fit these goals.

Richard A. Robbins, MD

Editor, SWJPCC

References

1. Kacik A. Highest-paid not-for-profit health system executives earn 33% raise in 2017. Modern Healthcare. June, 2019. Available at: https://www.modernhealthcare.com/executive-compensation/highest-paid-not-profit-health-system-executives-earn-33-raise-2017 (accessed 8/17/19).
2. Banner Health. Banner Health - physicians & surgeons salaries in the United States. Available at: https://www.indeed.com/cmp/Banner-Health/salaries?job_category=meddr (accessed 8/17/19).
3. Young KD. Docs get tiny raises while nonprofit healthcare CEOs get > $10M. Medscape. August 2, 2019. Available at: https://www.medscape.com/viewarticle/916423?src=WNL_trdalrt_190815_MSCPEDIT&uac=9273DT&impID=2060646&faf=1#vp_2 (accessed 8/17/19).
4. Robbins RA, Natt B. Medical image of the week: medical administrative growth. Southwest J Pulm Crit Care. 2018;17(1):35. [CrossRef]
5. Robbins RA. Survey shows support for the hospital executive compensation act. Southwest J Pulm Crit Care. 2016;13:90. [CrossRef]

Cite as: Robbins RA. CEO compensation-one reason healthcare costs so much. Southwest J Pulm Crit Care. 2019;19(2):76-8. doi: https://doi.org/10.13175/swjpcc055-19 PDF 

Doctor or Money Shortage in California?

An LA Times article titled “California doesn’t have enough doctors. To recruit them, the state is paying off medical school debt” describes a program where the State of California will pay off student debts using Proposition 56 tobacco tax revenue (1). California’s program is aimed at increasing the number of doctors who see Medi-Cal patients which has not kept pace with the rapid expansion of the state’s healthcare program for the poor, which now covers 1 in 3 residents in the state. The trends of decreasing doctors who accept Medi-Cal along with the increasing number of Medi-Cal patients led healthcare, education and business leaders to form the California Future Health Workforce Commission (CFHWC) in 2017 to study the state’s impending healthcare crisis (2). The CFHWC task force ultimately proposed a $3-billion plan over the next 10 years including $120 million for loan forgiveness incentives that’s meant to ensure physicians and dentists take on Medi-Cal patients. Another component of the program would allow nurse practitioners to practice independently from physicians.

The program is telling of both education and reimbursement in California. The CFHWC task force states that California is experiencing a shortage of doctors (3). This is not true. It is true that the graduation of doctors has not kept pace with the expanding California population. The national average of medical school students per 100,000 people is 30.3; California has 18.4 students per 100,000 (1,3). That’s the third-lowest rate among the 45 states that have at least one medical school. California has made relatively few investments in increasing enrollment at medical schools in the state. The only new public medical school to open in California in the last four decades is at UC Riverside and class size has only slightly expanded in the other schools (1,3). At the same time, more than one-third of the state’s doctors and nurse practitioners are reaching retirement age (1).

More than 60% of California’s students who attended medical school in 2017 left the state for their residency, according to the commission’s report. Most doctors settle near their residencies and California must expand the number of residency positions offered according to the CFHWC task force (1,3). They added that the state has historically underfunded those programs (1,3).

Despite these deficiencies, California does not have a shortage of doctors compared to other states (Table 1).

Table 1. Number of physicians per 100,000 population (Phys/10⁵ Pop) by state (2016 data, 4).

In 2016 California ranked nineteenth of the fifty states in numbers of physicians per 100,000 population (4). In addition, it ranked 22^nd in active primary care physicians (4).

What the CFHWC task force really means (and says intermittently) is that the number of doctors willing to accept Medi-Cal payment is low. The reason for this is pretty simple, Medi-Cal reimbursement is abysmally small. For a routine office call (CPT code 99213) Medi-Cal reimburses $24.00 (5). This office code is for about 15 minutes of patient contact and must include: 1. an expanded problem focused history, 2. an expanded problem focused examination, and 3. medical decision making of low complexity. This might be difficult to accomplish in 15 minutes. Documentation and billing would require at least 5 minutes more if the physician is a lightning fast typist. In contrast, Medicare pays $77.72 and Arizona Health Care Cost Containment System (AHCCCS) Administration (Arizona’s Medicaid) pays $51.42. Income generated from a busy practice seeing only Medi-Cal patients at $24.00 per office visit would mean $72/hour, about $500/day (7 hours/day), $2500 per week ($500/day X 5 days a week) or about $120,000/year (48 weeks). Although office overhead (payroll, rent, vendors, information technology, insurance, office equipment, etc.) varies widely, in 2002 the average general internist’s office overhead was about $250,000 (6). Expenses have not likely decreased in the last 16 years meaning that under the very best of circumstances, a physician seeing only Medi-Cal patients would lose $130,000/year serving California’s poor.

Medi-Cal has seemed to attempt to place the financial burden of caring for the poor on physicians and nurse practitioners rather than solving the problem of low reimbursement. Recent residency graduates who agree to have their debt relieved by California in exchange for seeing Medi-Cal patients may find their debt increasing under California’s proposal. Cuts could be made in other areas (hospital costs, drugs, etc.) but ultimately it seems that adequate reimbursement will be necessary to solve the impending “healthcare crisis”.

Richard A. Robbins, MD

Editor, SWJPCC

References

1. Gutierrez M. California doesn’t have enough doctors. To recruit them, the state is paying off medical school debt. LA Times. July 16, 2019. Available at: https://www.latimes.com/politics/la-pol-ca-california-doctor-shortage-medical-debt-20190716-story.html (accessed 7/19/19).
2. Gutierrez M. $3 billion is needed to address California’s doctor shortage, task force says. LA Times. February 5, 2019. Available at: https://www.latimes.com/politics/la-pol-ca-california-future-health-workforce-commission-doctor-shortage-20190205-story.html (accessed 7/19/19).
3. Mijic V. Meeting the demand for health: fact sheet on California’s looming workforce crisis. California Future Health Workforce Commission. February 4, 2019. Available at: https://futurehealthworkforce.org/2019/02/04/ca-looming-workforce-crisis/ (accessed 7/19/19).
4. American Association of Medical Colleges. 2017 State Physician Workforce Data Report. Available at: https://store.aamc.org/downloadable/download/sample/sample_id/30/ (accessed 7/19/19).
5. Department of Healthcare Services Medi-Cal. Medi-Cal rates as of 07/15/2019 (codes 94799 thru 99600). Available at: https://files.medi-cal.ca.gov/pubsdoco/rates/rates_information.asp?num=22&first=94799&last=99600 (accessed 7/19/19).
6. Weiss GG. Expense survey: what it costs to practice today. Med Econ. 2002 Dec 9;79(23):36-8, 41. [PubMed]

Cite as: Robbins RA. Doctor of money shortage in California? Southwest J Pulm Crit Care. 2019;19(1):15-7. doi: https://doi.org/10.13175/swjpcc050-19 PDF

FDA Commissioner Gottlieb Resigns

Food and Drug Administration (FDA) Commissioner, Scott Gottlieb, has resigned after about 2 years (1). Gottlieb was a controversial appointee by the Trump administration due to his ties to the pharmaceutical industry. However, he stood out in the anti-regulatory Trump administration, where some officials such as Scott Pruitt, the former head of the Environmental Protection Agency, appeared intent on reducing the clout of the departments and agencies they headed. For nearly two years, Gottlieb has avidly promoted the FDA, inserting the agency into important health issues and sometimes taking on industries regulated by the agency.

Under Gottlieb’s leadership the FDA has made sweeping moves to lower smoking and vaping amongst minors. Gottlieb’s departure could throw into question other controversial tobacco initiatives he championed that have not yet emerged from the FDA, including proposals to ban menthol cigarettes and to reduce nicotine levels in cigarettes. In his resignation letter to Health and Human Services Secretary, Alex Azar, Gottlieb listed his accomplishments, including accelerating the approval of generic drugs and modernizing the process for handling novel gene and precision therapies to treat those with cancer.

The resignation took some senior FDA officials by surprise, and came as Gottlieb’s signature issue – youth vaping – is being reviewed by the White House Office of Management and Budget. The plan, detailed by Gottlieb last fall, would sharply restrict the sale of flavored e-cigarettes to curb a surge in underage vaping, which he argues could lead to a whole new generation addicted to nicotine.

Gottlieb, who has been commuting weekly to Washington from his home in Connecticut, said he wants to spend more time with his family. The resignation was apparently not sought by the White House. A senior White House official said Gottlieb had spoken to President Trump, and that the president liked the FDA chief and did not want him to leave. While Gottlieb had some policy disagreements with the White House, he is well respected, and could even be asked to take another post, said two officials. Gottlieb declined to comment on that possibility.

Most praised Gottlieb including his predecessor, Robert Califf, and Friends of Cancer Research and Tobacco Free Kids (1). However, he was not without his critics. Pieter Cohen, an associate professor at Harvard Medical School who conducts research into the safety of dietary supplements, faulted Gottlieb for not taking significant action on major safety problems involving dietary supplements. Raeford Brown, a professor of anesthesiology and pediatrics at the University of Kentucky, criticized Gottlieb’s opioid policy. “I am concerned, because he seems to have a tendency to spend most of his time talking and very little of his time implementing policy.” The advocacy group Public Citizen said that Gottlieb’s time as the agency's head "was marked by regulatory decision making regarding medications and medical devices that tilted further in favor of industry's financial interests rather than the interests of public health (2).” The group cited the controversial approval in April of an opioid called Dsuvia, which is 10 times more powerful than fentanyl.

Richard A. Robbins, MD

Editor, SWJPCC

References

1. Laurie McGinley L, Bernstein L, Dawsey J.  FDA Commissioner Gottlieb, who raised alarms about teen vaping, resigns. Washington Post. March 5, 2019. Available at: https://www.washingtonpost.com/health/2019/03/05/fda-commissioner-gottlieb-who-raised-alarms-about-teen-vaping-resigns/?utm_term=.b50dd0bbb2ae (accessed 3-6-19).
2. Scutti S, Diamond J, Goldschmidt D. FDA Commissioner Dr. Scott Gottlieb to resign next month. CNN Politics. March 5, 2019. Available at: https://www.cnn.com/2019/03/05/politics/gottlieb-resigning-fda-health-bn/index.html (accessed 3-6-19).

Cite as: Robbins RA. FDA commissioner Gottlieb resigns. Southwest J Pulm Crit Care. 2019;18(3):65-6. doi: https://doi.org/10.13175/swjpcc012-19 PDF 

Physicians Generate an Average $2.4 Million a Year Per Hospital

Hospitals are more frequently employing physicians which has been associated with increasing costs (1). Physician generated revenue may be one explanation for the upsurge in hospital employed physicians. According to a survey from Merritt Hawkins, physicians generate an average $2,378,727 per year in net revenue on behalf of their affiliated hospitals (2). This includes both net inpatient and outpatient revenue derived from patient hospital admissions, tests, treatments, prescriptions, and procedures performed or ordered by physicians. Travis Singleton, Merritt Hawkins Executive Vice President commented, “Physicians continue to drive the financial health and viability of hospitals ...”.

It is not just physician specialists who generate high dollar volumes for hospitals, the survey indicates. Family physicians generate an average of $2.1 million in net revenue annually for their affiliated hospitals, while general internists generate an average of almost $2.7 million. The average net revenue generated by all physicians included in the survey ($2,378,727) is up 52% from 2016, the last year Merritt Hawkins conducted the survey. Average revenue generated by each of the 18 medical specialties included in the survey increased compared to 2016, in most cases significantly.

The survey also provides a cost/benefits analysis showing which physicians provide the best return on investment by comparing salaries in various medical specialties to revenue generated by physicians in those specialties. Family physicians showed the best return with an average starting salary of $241,000, according to Merritt Hawkins’ data, while generating nine times that much in hospital revenue. “Primary care physicians such as family physicians represent an excellent return on investment …” Singleton said.

While the number of hospital inpatient stays has decreased or remained flat in recent years, the cost per hospital stay has increased, said Singleton, one factor that may be driving the comparatively high revenue averages generated by physicians. In addition, the number of hospital outpatient visits has more than tripled since 1975 and the average cost of these visits has grown, a further reason for physician revenue increases, according to Singleton. An additional reason is that hospitals are reimbursed at a higher rate for the same services compared to physicians’ offices. According to Winn et al. (3), outpatient hospital costs are about double compared to independent physician offices for the same chemotherapy services (3).

Richard A. Robbins, MD

Editor, SWJPCC

References

1. Kacik A. Rapid rise in hospital-employed physicians increases costs. Modern Healthcare. March 16, 2018. Available at: https://www.modernhealthcare.com/article/20180316/TRANSFORMATION02/180319913/rapid-rise-in-hospital-employed-physicians-increases-costs (accessed 3-1-19).
2. Merritt Hawkins. Survey: Physicians Generate an Average $2.4 Million a Year Per Hospital. February 25, 2019. Available at: https://www.merritthawkins.com/uploadedFiles/MerrittHawkins_PressRelease_2019.pdf (accessed 3-1-19).
3. Winn AN, Keating NL, Trogdon JG, Basch EM, Dusetzina SB. Spending by commercial insurers on chemotherapy based on site of care, 2004-2014. JAMA Oncol. 2018 Apr 1;4(4):580-1. [CrossRef] [PubMed] 

Cite as: Robbins RA. Physicians generate an average $2.4 million a year per hospital. Southwest J Pulm Crit Care. 2019;18(3):61-2. doi: https://doi.org/10.13175/swjpcc010-19 PDF 

Drug Prices Continue to Rise

President Trump asserted in a Tweet that drug prices declined in 2018 for the first time in nearly 50 years. However, President Trump’s assertion does not agree with my personal experience or the facts.

I take dofetilide (Tikosyn®) for atrial fibrillation. However, when I recently ordered the medication, my co-pay for 3 months increased from $95 in October, 2018 to $140, an increase approaching 50%. The amount the drug manufacturer (Pfizer) raised the price is unclear but the amount charged by the on-line pharmacy (AllianceRxWalgreens) that my insurance company (Blue Cross/Blue Shield Arizona) mandates I use, likely reflects a price increase in the drug.

Trump’s claim that drug prices decreased in 2018 is wrong. A recent analysis of brand-name drugs by the Associated Press found 96 price increases for every price cut in the first seven months of 2018 (1). At the start of last year, drug makers hiked prices on 1,800 medicines by a median of 9.1 percent, and many continued to increase prices throughout the year.

Trump met with Ian Read, CEO of Pfizer, in July, 2018 following a scolding via Twitter where Trump condemned Pfizer’s increase in drug prices. Pfizer agreed to delay the increases until early 2019 and now those price increases are apparently occurring.

Trump’s tweet comes just days after the president summoned his top domestic policy advisers, including health secretary Alex Azar, to the White House to discuss the slate of drug price hikes that came Jan. 1. Last week, Trump blasted pharmaceutical companies for those increases, writing on Twitter “drug makers are not living up to their commitments.”

Azar, who has been vocally defending his agency’s work to lower drug prices in television appearances and on Twitter this month, retweeted Trump’s claim of an historic price drop in 2018, but tacked on a comment saying, “President Trump has done more to address high drug prices than any President in history. More to come!”

Clearly, both Trump and Azar are engaging in Washington spin. Just before the November 2018 election, Trump announced a price-reduction plan that ties what Medicare pays for certain drugs to much lower prices paid in other economically advanced countries (1). Congressional Democrats have also introduced legislation to tackle the issue. However, Trump and congressional Democrats are now locked in a stalemate that shutdown the government and it seems unlikely they could come together to take actions on drug prices this year.

Richard A. Robbins, MD

Editor, SWJPCC

Reference

1. Associated Press. Trump hails drug price decline not supported by the evidence. January 11, 2019. Available at: https://www.apnews.com/bce3a214039c4271b3f3337e0e522b2a (accessed 1/14/19).

Cite as: Robbins RA. Drug prices continue to rise. Southwest J Pulm Crit Care. 2019;18(1):20-1. doi: https://doi.org/10.13175/swjpcc002-19 PDF

New Center for Physician Rights

Cases of unfair physician treatment by regulatory boards and hospitals have been well publicized. However, little action to insure oversight of physician regulatory bodies has been done. Physicians who believe they have been subjected to unfair discipline now have a place to turn for information, advice, and support. The new center called The Center for Physician Rights (CPR) was founded by Kernan Manion, MD. According to their website the Center will offer:

1. Free confidential case review;
2. Case consultation and coaching;
3. Serve as a central authoritative informational and consultative resource;
4. Pursue organizational and legislative change.

CPR will develop an informational website and produce a monthly e-newsletter / blog updating subscribers of relevant developments. They hope to serve as the definitive “go to” knowledge resource by establishing a centralized reference library with essential resources based on their extensive research and cumulatively accruing knowledge of judicial decisions, case trends and operant medical licensing boards.

Manion’s own career-ending experience with the North Carolina Medical Board (NCMB) was well publicized (1). His case dates back to September 2009, when he worked as a civilian psychiatrist under contract with the Deployment Health Center at Naval Hospital Camp Lejeune, in Jacksonville, North Carolina. After he raised concerns with the US Navy and a personnel contractor about what he believed was dangerously deficient care of active duty service members who had posttraumatic stress disorder, he was dismissed. Later an anonymous source raised concerns about his mental health, which resulted in an investigation by the North Carolina Medical Board. Although an independent, comprehensive psychological evaluation determined he had no mental disorder or other psychological impairment, an assessment by the Board concluded otherwise, and he was forced to deactivate his medical license. In 2016, he launched a lawsuit against the NCMB, which was ultimately unsuccessful on appeal because it exceeded the time limit for filing a petition. Manion blamed the NCMB for using stall tactics to delay the legal process.

Richard A. Robbins, MD

Editor, SWJPCC

Reference

1. Anderson P.  One-Man Fight: MD Takes on State Medical Board, PHP. Medscape. November 8, 2016. Available at: https://www.medscape.com/viewarticle/871569 (accessed 11/13/18).

Cite as: Robbins RA. New center for physician rights. Southwest J Pulm Crit Care. 2018;17(5):137. doi: https://doi.org/10.13175/swjpcc116-18 PDF 

CMS Decreases Clinic Visit Payments to Hospital-Employed Physicians and Expands Decreases in Drug Payments 340B Cuts

The Centers for Medicare and Medicaid Services (CMS) has reimbursed hospital-employed physicians more than self-employed physicians. However, CMS is moving forward with plans to expand its site-neutral payment policy to clinic visits, a move that could save the agency hundreds of millions of dollars (1).

Clinic visits are the most common service billed to CMS. CMS estimates that it is now paying about $75 to $85 more on average for the same service in hospital outpatient settings compared to physician offices. Beneficiaries are responsible for 20% of that increased cost. The payment change is projected to save Medicare $610 million and patients about $150 million. Higher CMS payments to hospital-employed physicians have also been have associated with higher commercial prices and spending for outpatient care which could save CMS even more money (2).

However, CMS abandoned its 2016 plan to expand a site-neutral rule. That regulation would have paid hospital off-campus facilities less than hospital-based outpatient departments if they started billing Medicare after Nov. 2, 2015. Following pushback from the American Hospital Association and others, the agency said it decided to not finalize that provision.

CMS’ 340B Drug Discount Program requires drug manufacturers to provide outpatient drugs to eligible hospital-based departments at significantly reduced prices. CMS will expand last year's cuts to 340B discounts given to outpatient facilities. Last year, the agency cut 340B drug payments by $1.6 billion, or 22.5% less than the average sales price. CMS is expanding the 340B cut to off-campus provider-based departments to prevent hospitals from moving their drug administration services for 340B-acquired drugs to an off-campus facility to receive a higher payment.

Richard A. Robbins, MD

Editor, SWJPCC

References

1. Dickson V. CMS slashes clinic visit payments, expands 340B cuts. Modern Healthcare. November 2, 2018. Available at: https://www.modernhealthcare.com/article/20181102/NEWS/181109978 (accessed 11/2/18).
2. Neprash HT, Chernew ME, Hicks AL, Gibson T, McWilliams JM. Association of financial integration between physicians and hospitals with commercial health care prices. JAMA Intern Med. 2015 Dec;175(12):1932-9. [CrossRef] [PubMed]

Cite as: Robbins RA. CMS decreases clinic visit payments to hospital-employed physicians and expands decreases in drug payments 340b cuts. Southwest J Pulm Crit Care. 2018;17(5):136. doi: https://doi.org/10.13175/swjpcc115-18 PDF 

Big Pharma Gives Millions to Congress

Pharmaceutical companies contribute millions of dollars to U.S. senators and representatives as part of a multipronged effort to influence health care lawmaking and spending priorities. Kaiser Health News (KHN) recently developed a database of contributions by pharmaceutical manufacturers to members of Congress for the past 10 years (1). This was done by examining campaign finance reports from the Federal Election Commission to track donations from political action committees (PACs). The amounts are totaled quarterly and the exact amounts but can change as amendments and refunds are reported. Occasionally, refunds are reported in a different cycle from the original contribution, resulting in a negative total for the cycle. The database can be used to look up any individual candidate or pharmaceutical company and will be updated periodically according to KHN. Contributions to members of Congress from the Southwest states of Arizona, California, Colorado, Hawaii, Nevada and New Mexico are summarized in Appendix 1.

The drug industry ranks among lawmakers' most generous patrons. In the past decade, Congress has received $79 million from 68 pharma political action committees, or PACs, run by employees of companies that make drugs. The amount has steadily increased each year from $11.8 million in 2008 to $15.8 million last year. Since the beginning of last year, 34 lawmakers have each received more than $100,000 from pharmaceutical companies. In the Southwest one of those – Rep. Kevin McCarthy of California, the House Republican majority leader, received more than $200,000 so far this election cycle (2017 and 2018 to date) and has received more than $1,000,000 over the past 10 years (Appendix 1).

While PAC contributions to candidates are limited, a larger donation frequently accompanies individual contributions from the company's executives and other employees. According to Medpage Today, it also sends a clear message to the recipient, one they may remember when lobbyists come calling: “There's more where that came from” (2).

The KHN analysis shows that pharmaceutical companies give generously to a wide swath of lawmakers. Since the beginning of 2017, drug makers contributed to 217 Republicans and 187 Democrats, giving only slightly more on average to Republicans, who currently control both chambers of Congress (2). This was also the case for Democrats during the 2010 election cycle, when they controlled Congress.

Money also tends to flow to congressional committees with jurisdiction over pharmaceutical issues that can affect things like drug pricing and FDA approval. in early 2017, For Example, Rep. Greg Walden from Oregon has watched his coffers swell since he became chairman of the powerful House Committee on Energy and Commerce (1). Walden has received over $278,000 this election cycle. The six members of the committee from Southwest states (Reps. Walters, Eshoo, DeGette, Matsui, McNerney, and Peters) have also received $415,500 to date.

Nearly 50 drug makers made contributions with the amount roughly following the size of the company. Genentech, Pfizer, Amgen, Bristol-Myers Squibb and Eli Lilly were the top 5 over the past 10 years. The PAC for Purdue Pharma, the embattled opioid manufacturer, gave to only a handful of members this cycle. However, it focused much of its giving on lawmakers from North Carolina, its headquarters for manufacturing and technical operations. Insys, the opioid manufacturer from Chandler, Arizona, was not listed as making any contributions.

Campaign contributions tell only part of the story. Drugmakers also spend millions of dollars lobbying members of Congress. So far over $430 million has been spent this election cycle by pharmaceutical companies lobbying Congress (3). Another source is indirect lobbying through to patient advocacy groups, which provide patients to testify on Capitol Hill and organize social media campaigns on drug makers' behalf. A previous investigation by Kaiser Health News, "Pre$cription for Power," examined charitable giving by top drugmakers and found that 14 of them donated a combined $116 million to patient advocacy groups in 2015 alone (4).

Previous studies have suggested that political contributions may influence voting behavior. These sizable contributions may help explain, at least in part, why drug prices in the US are the highest in the world and why Congressional legislation regulating these prices has been so difficult to pass.

Richard A. Robbins, MD

Editor, SWJPCC

References

1. Lucas E, Lupkin S.   Pharma cash to Congress. Kaiser Health News. October 16, 2018. Available at: https://khn.org/news/campaign/ (accessed 10/23/18).
2. Huetteman E, Lupkin S. Drugmakers funnel millions to lawmakers. Medpage Today. October 16, 2018. Available at: https://www.medpagetoday.com/washington-watch/electioncoverage/75737?xid=nl_mpt_investigative2018-10-23&eun=g687171d0r&utm_source=Sailthru&utm_medium=email&utm_campaign=InvestigateMD_102318&utm_term=InvestigativeMD (accessed 10/23/18).
3. Pharmaceuticals/health products. OpenSecrets.org. August 28, 2018. Available at: https://www.opensecrets.org/lobby/indusclient.php?id=h04 (accessed 10/23/18).
4. Kopp E, Lucas E, Lupkin S. Pre$cription for power. Kaiser Health News. 2018. Available at: https://khn.org/patient-advocacy/#+initialWidth=1170&childId=patient_advocacy&parentTitle=Pre%24cription%20For%20Power%3A%20KHN%20Patient%20Advocacy%20DatabaseKaiser%20Health%20News&parentUrl=https%3A%2F%2Fkhn.org%2Fpatient-advocacy%2F (accessed 10/23/18).

Cite as: Robbins RA. Big pharma gives millions to Congress. Southwest J Pulm Crit Care. 2018;17(4):117-8. doi: https://doi.org/10.13175/swjpcc113-18 PDF 

Gilbert Hospital and Florence Hospital at Anthem Closed

Gilbert Hospital and Florence Hospital at Anthem, two medical centers owned by parent company New Vision Health LLC, will close according to the Arizona Republic (1). Gilbert Hospital's emergency room will stay open until 1 p.m. Saturday and the Florence ER will close 8 a.m. Monday. Anyone receiving care was to be transferred or discharged, according to company spokesman Alex Stevenson.

The two hospitals and the parent company have been plagued with financial troubles. Creditors filed for involuntary Chapter 11 bankruptcy protection this spring, the second time they had faced bankruptcy in four years. A Maricopa County Superior Court judge on June 7 appointed a receiver, who concluded that the financial problems "were simply too significant to overcome." Bankruptcy court documents show the two medical centers owe creditors at least $13.1 million in unpaid loans. Both hospitals were operating under terminated leases because they could not pay rent, according to court records.

Gilbert Hospital was recently penalized by Medicare because of high rates of patient injuries, according to Kaiser Health News (2). Gilbert Hospital lost 1 percent of its Medicare funding this fiscal year. New Vision Health is also the owner of Peoria Regional Medical Center which filed for Chapter 11 bankruptcy protection in federal court in October 2017.

Richard A. Robbins, MD

Editor, SWJPCC

References

1. Altavena L. Bankruptcy forces abrupt closure of Gilbert Hospital, Florence Hospital at Anthem. Arizona Republic. June 15, 2018. Available at: https://www.azcentral.com/story/news/local/gilbert/2018/06/15/bankruptcy-gilbert-hospital-florence-hospital-anthem-close/705452002/ (accessed 5/16/18)
2. Rau J. Medicare penalizes group of 751 hospitals for patient injuries. Kaiser Health News. December 12, 2017. Available at: https://khn.org/news/medicare-penalizes-group-of-751-hospitals-for-patient-injuries/ (accessed 6/16/18)

Cite as: Robbins RA. Gilbert Hospital and Florence Hospital at Anthem closed. Southwest J Pulm Crit Care. 2018;16(6):340. doi: https://doi.org/10.13175/swjpcc080-18 PDF 

Editor's Note: Gilbert Hospital was located at 5656 S. Power in Gilbert and should not be confused with Mercy Gilbert Medical Center which is located 3555 S. Val Vista Drive also in Gilbert.

CMS’ Star Ratings Miscalculated

Modern Healthcare is reporting that the Centers for Medicare and Medicaid Services (CMS) has miscalculated hospitals star ratings since they were first released in 2016 (1). Officials at Rush University Medical Center in Chicago exclusively disclosed their analysis and correspondence to Modern Healthcare. The investigators found that instead of evenly weighting the eight measures in the safety of care group, the CMS' star ratings formula relied heavily on one measure— The Patient Safety and Adverse Events Composite, known as PSI 90 —for the first four releases of the ratings and then complication rates from hip and knee replacements for the latest release. The single measure accounted for about 98% of a hospital's performance in the safety group, according to Rush's analysis. The safety group can also greatly influence a hospital's overall star rating, the analysis concluded. Rush's findings likely prompted the CMS to announce this week that it would postpone the July release of its star ratings (1).

The statistical model the CMS uses likely caused the miscalculation. The model, called latent variable modeling, uses scores for seven groups of measures to calculate the star ratings:

1. Mortality
2. Safety of Care
3. Readmission
4. Patient Experience
5. Effectiveness of Care
6. Timeliness of Care
7. Efficient Use of Medical Imaging

The three outcome groups—mortality, safety and readmissions—are each weighted the most at 22% each. Measures within each group are supposed to be evenly weighted to calculate the hospital's performance in that area. Rush's analysis found that the weight given to the PSI-90 measure was much greater than the seven other measures in the safety group. Specifically, PSI-90 was weighted 1,010 times stronger than the catheter-associated urinary tract infections measure, 81 times stronger than the C. difficile infection rates measure, 51 times stronger than the central line-associated bloodstream infection rates measure and 20 times stronger than either the surgical site infection rate measure.

Latent variable modeling changes the weighting and is inappropriate for measuring clinical outcomes, said David Levine, senior vice president of advanced analytics and informatics at Vizient (1). "Given the disproportionate weighting of the safety scores over time, they did not represent a composite measure," said Dr. Omar Lateef, an author of the analysis and Rush's senior vice president and chief medical officer (1). Lateef said he and his colleagues at Rush were alarmed by a rating drop from 5 to 3 stars because they have improved performance on five of the eight safety measures since the December release. " Lateef added that although CMS was initially dismissive of Rush’s concerns that CMS has come around since presented with Rush’s analysis.

CMS announced earlier this week that it was delaying release of the star ratings "to address stakeholders concerns." No date has been set for when the new ratings will be released.

Richard A. Robbins, MD

Editor, SWJPCC

Reference

1. Maria Castellucci M. CMS star rating system has been wrong for two years, health system finds. Modern Healthcare. June 15, 2018. Available at: http://www.modernhealthcare.com/article/20180615/TRANSFORMATION01/180619933?utm_source=modernhealthcare&utm_medium=email&utm_content=20180615-TRANSFORMATION01-180619933&utm_campaign=am (accessed 6/15/18).

Cite as: Robbins RA. CMS' star ratings miscalculated. Southwest J Pulm Crit Care. 2018;16(6):338-9. doi: https://doi.org/10.13175/swjpcc078-18 PDF 

VA Announces Aggressive New Approach to Produce Rapid Improvements in VA Medical Centers

The U.S. Department of Veterans Affairs (VA) announced steps that it is taking as part of an aggressive new approach to produce rapid improvements at VA’s low-performing medical facilities nationwide (1). VA defines its low-performing facilities as those medical centers that receive the lowest score in its Strategic Analytics for Improvement and Learning (SAIL) star rating system, or a one-star rating out of five. The SAIL star rating was initiated in 2016 and uses a variety of measures including mortality, length of hospital stay, readmission rates, hospital complications, physician productivity and efficiency. A complete listing of the VA facilities, their star ratings and the metrics used to determine the ratings is available through the end of fiscal year 2017 (2). Based on the latest ratings, the VA currently has 15 one-star facilities including Denver, Loma Linda, and Phoenix in the Southwest (Table 1).  

Table 1. VA facilities with one-star ratings (1).

1. Big Spring (Texas)
2. Denver (Colorado)
3. Dublin (Georgia)
4. El Paso (Texas)
5. Jackson, (Mississippi)
6. Hampton (Virginia)
7. Harlingen (Texas)
8. Loma Linda (California)
9. Memphis (Tennessee)
10. Murfreesboro (Tennessee)
11. Nashville (Tennessee)
12. Phoenix (Arizona)
13. Roseburg (Oregon)
14. Walla Walla (Washington).
15. Washington (DC)

The steps VA is taking to produce rapid improvements at its low-performing facilities include (Table 2):

Table 2. VA steps to produce rapid improvements at low-performing facilities (1).

1. Central, national accountable leadership – VA has designated Dr. Peter Almenoff, Director of VA’s Office of Reporting, Analytics, Performance, Improvement and Deployment (RAPID) Healthcare Improvement Center, to oversee improvement at each of the centers.
2. Comprehensive analysis and identification of improvement targets – VA is employing a new initiative, known as Strategic Action Transformation (STAT), that uses a rigorous and formal approach based on clinical performance indicators to identify vulnerabilities in each low-performing facility and set specific targets for improvement.
3. Provision of national resources for improvement – VA’s RAPID team of experts will use sophisticated statistical tools to track the progress of improvement against these targets, and, where warranted, will dispatch a team of expert improvement coaches quickly to the medical centers to assist them in meeting the goals.
4. Accountability for results –VA’s Central Office will review each of the facilities quarterly, and if the facilities fail to make rapid substantial progress in their improvement plan, VA leadership will take prompt action, including changing the leadership of the medical center.

VA secretary David Shulkin stated that “President Trump has made it clear that our Veterans deserve only the best when it comes to their healthcare, and that’s why we are focusing on improving our lowest performing facilities nationwide” (1). The VA recently removed the Roseburg Oregon VA Medical Center director who was accused of manipulating hospital admissions to improve the hospital’s rating (3). Almenoff, the overseer of improvement, was transferred from his position as the VA Integrated Network 15 director in 2008 when the Marion VA came under fire for substandard care raising concerns from several Illinois legislators, including the then junior senator from Illinois, Barack Obama (4).

A major hurdle will be for the VA to hire sufficient staff to improve care. As of the end of June, the VA reported 35,554 job vacancies system-wide, and VA Secretary David Shulkin has cited challenges with hiring doctors and nurses, particularly mental health care professionals (5). The agency set a goal to hire 1,000 mental health care workers in 2017. The VA hired 900 last year, but lost 945. The Veterans Access, Choice and Accountability Act of 2014 appropriated several billion dollars to the VA but this apparently did not lead to hiring of sufficient healthcare providers.

Richard A. Robbins, MD

Editor, SWJPCC

References

1. VA Office of Public and Intergovernmental Affairs. VA announces aggressive new approach for low-performing medical centers. February 1, 2018. Available at: https://www.va.gov/opa/pressrel/pressrelease.cfm?id=4004 (accessed 2/14/18).
2. US Department of Veterans Affairs. Quality care. Available at: https://www.va.gov/QUALITYOFCARE/measure-up/Strategic_Analytics_for_Improvement_and_Learning_SAIL.asp (accessed 2/14/18).
3. Phillips D. Director of veterans hospital accused of manipulating ratings is replaced. New York Times. February 1, 2018. Available at: https://www.nytimes.com/2018/02/01/us/veterans-roseburg-director.html (accessed 2/14/18).
4. Durbin D, Obama B, Costello J, Shimkus J. Letter to The Honorable James B. Peake, M.D., Secretary of Veterans' Affairs. July 23, 2008. Available at: https://votesmart.org/public-statement/363179/letter-to-the-honorable-james-b-peake-md-secretary-of-veterans-affairs?flavour=mobile&utm_source=votesmart&utm_medium=mobile-link&utm_campaign=flavourswitch#.WoR3Dq6nGUk (accessed 2/14/18).
5. Wentling N. Federal unions march on VA headquarters to protest staffing shortages. Stars and Stripes. February 13, 2018. Available at: https://www.stripes.com/federal-unions-march-on-va-headquarters-to-protest-staffing-shortages-1.511543 (accessed 2/14/18).

Cite as: Robbins RA. VA announces aggressive new approach to produce rapid improvements in VA medical centers. Southwest J Pulm Crit Care. 2018;16(2):91-3. doi: https://doi.org/10.13175/swjpcc034-18 PDF

Healthcare Payments Under the Budget Deal: Mostly Good News for Physicians

In the early morning hours last Friday (2/9/18) Congress passed and President Trump signed a massive budget agreement (1). The spending package will cost about $320 billion over 10 years, according to the Congressional Budget Office. Payments for healthcare substantially increase under the deal. Most praised the agreement. "Congress made the right choice this morning for patients and communities by voting to halt damaging cuts to hospitals that care for low-income working families and others who face financial challenges," said Dr. Bruce Siegel, CEO of America's Essential Hospitals, which represents the nation's safety-net facilities. Marc Goldwein of the Center for a Responsible Federal Budget called the healthcare provisions the one "beacon of light" in what otherwise is an exorbitantly costly budget bill. Goldwein praised its mix of structural reforms with "reasonable policy” and liked that the bill pays for the increased healthcare spending.

The bill extends Medicare physician fee cuts that provide about $38 billion in offsets to the increased spending (2). The bill preserves the planned physician fee cuts at 0.5% in 2018 but would reduce the cut to 0.25% in 2019. Not all were pleased by the continuation of the cuts. Calling it "contrary to Congress' intent” ACP President Jack Ende called on Congress to enact permanent relief from the physician fee cuts.

Other major healthcare provisions include (1,2):

• Continued funding for community health centers for two years.
• A two-year delay to the already-in-effect payment cuts to Medicaid disproportionate-share hospitals (DSH) which predominately represent safety net hospitals.
• A two-year delay in the low-volume adjustment program which predominately affects rural hospitals.
• An additional 4-year extension of the Children's Health Insurance Program (CHIP), which had received a 6-year extension in the continuing resolution that was approved in January.
• Forcing pharmaceutical companies to pay 75 percent of the cost of drugs for seniors in Medicare’s coverage gap a year earlier than planned.
• Repeal of the "therapy cap”, a move long pushed by therapy provider groups and the American Association of Retired Persons. This would permanently repeal Medicare's coverage limit on physical therapy, speech-language pathology, and outpatient treatment.
• $6 billion for the opioid epidemic, which will go toward state grants, public prevention programs, and law enforcement.
• Funding for the Maternal, Infant, and Early Childhood Home Visiting Program, which helps at-risk pregnant women and families navigate the social safety net.
• A reduction in Medicare payments to Home health agencies. They're expected to lose $3.5 billion in Medicare payments starting in 2020 due to a change in the way Medicare calculates annual payment updates.
• Funding the Chronic Care Act, which opens up new flexibilities for Medicare Advantage and care for chronically ill Medicare beneficiaries.
• A 2-year delay in implementing The Affordable Care Act's high-cost plan tax, popularly known as the “Cadillac tax”. This was a 40 percent excise tax on employer plans exceeding $10,200 in premiums per year for individuals and $27,500 for families. The tax is now scheduled to take effect in 2020.
• Repeal of Independent Payment Advisory Board (IPAB). Provider groups from the American Medical Association to the American Hospital Association applauded the move, even though Congress has never triggered the panel, which was charged to find and implement Medicare savings.

However, not all were pleased by the repeal of cost containments. IPAB repeal doesn't cost much in the grand scheme of things, said Mark Goldwein from the Center for a Responsible Federal Budget but “the long-term policy implications are huge, and a big mistake” (2). Kaiser Family Foundation Senior Vice President Larry Levitt chided that the bill demonstrates “…healthcare cost containment generally seems better in theory than in practice” (2).

Richard A. Robbins, MD

Editor, SWJPCC

References

1. Luthi S. Beacon of light: Healthcare additions in budget law pleasantly surprise providers. Modern Healthcare. February 9, 2018. Available at: http://www.modernhealthcare.com/article/20180209/NEWS/180209895 (accessed 2/12/18).
2. Ault A. Trump signs budget deal, cuts Medicare fee in 2019. Medscape. February 9, 2018. Available at: https://www.medscape.com/viewarticle/892491 (accessed 2/12/18).

Cite as: Robbins RA. Healthcare payments under the budget deal: mostly good news for physicians. Southwest J Pulm Crit Care. 2018;16(2):88-9. doi: https://doi.org/10.13175/swjpcc032-18 PDF 

Hospitals Plan to Start Their Own Generic Drug Company

The New York Times reports that groups representing more than 450 hospitals plan to form their own generic drug company (1). Intermountain Healthcare is leading the collaboration with several other large hospital groups, Ascension, SSM Health and Trinity Health, in consultation with the U.S. Department of Veterans Affairs, to form a not-for-profit drug company. The new firm is looking to create generic versions of about 20 existing drugs that the group says cost too much now or are in short supply. The article did not name the drugs targeted but expects the first of its pharmaceutical products to become available in 2019. Members of the consortium will contribute funds to finance the new drug company.

Richard A. Robbins, MD

Editor, SWJPCC

Reference

1. Abelson R, Thomas K. Fed up with drug companies, hospitals decide to start their own. New York Times. January 18, 2018. Available at: https://www.nytimes.com/2018/01/18/health/drug-prices-hospitals.html (accessed 1/19/18).

Cite as: Robbins RA. Hospitals plan to start their own generic drug company. Southwest J Pulm Crit Care. 2018;16(1):48. doi: https://doi.org/10.13175/swjpcc014-18 PDF

Flu Season and Trehalose

Most of us who are practicing medicine know that we are in a very active flu season. This was brought home to me when last week trying to admit a patient to the hospital from the office. She was a bone marrow transplant patient who had severe diarrhea and dehydration probably secondary to C. difficile. Hospital admissions said the patient had to be sent to the Emergency Room because the hospital was full due to the flu epidemic.

Nationwide there has been a dramatic increase in the number of hospitalizations due to influenza over the past week from 13.7 to 22.7 per 100,000 (1). Influenza A(H3N2) has been the most common form of influenza reported this season. These viruses are often linked to more severe illness, especially in children and people age 65 years and older. Fortunately, the CDC also says that the flu cases may be peaking. However, at least 11 to 13 more weeks remain in the influenza season and strains other than A(H3N2) will undoubtedly show up.

Clinicians are reminded that in addition to the flu vaccine for prevention, to begin neuraminidase inhibitor antivirals early. Patients at high risk for complications (elderly, children, pregnant women, patients with chronic diseases such as diabetes, heart disease and asthma) should have treatment begun before laboratory confirmation (2).

Many clinicians have noted an increase in the incidence and severity of C. difficile infection over the past 15 years. Because the infection occurs after high dose antibiotics or antibiotics prescribed over a long period of time, it was assumed that this was the cause of the rising rates of infection. However, an alternative explanation was offered by an article appearing last week in Nature (3). The authors showed that two epidemic ribotypes of C. difficile (RT027 and RT078) have acquired unique mechanisms to metabolize low concentrations of the disaccharide trehalose increasing virulence. Trehalose is a sugar widely distributed in nature and used mostly a stabilizing agent in processed foods and products (including influenza vaccine). It was introduced about the same time as the upsurge in C. difficile infection began in the early 2000's.

Richard A. Robbins, MD

Editor, SWJPCC

References

1. Brooks M. US influenza activity widespread and intense, may be peaking. Medscape. January 12, 2018. Available at: https://www.medscape.com/viewarticle/891265?nlid=120062_3901&src=wnl_newsalrt_180112_MSCPEDIT&uac=9273DT&impID=1533392&faf=1 (accessed 1/14/18). 
2. Campbell A. 2016-2017 influenza antiviral recommendations. Medscape. January 9, 2017. Available at: https://www.medscape.com/viewarticle/873988?src=par_cdc_stm_mscpedt&faf=1 (accessed 1/14/18).
3. Collins J, Robinson C, Danhof H, et al. Dietary trehalose enhances virulence of epidemic Clostridium difficile. Nature. 2018 Jan 3. [CrossRef] [PubMed]

Cite as: Robbins RA. Flu season and trehalose. Southwest J Pulm Crit Care. 2018;16(1):44-5. doi: https://doi.org/10.13175/swjpcc011-18 PDF 

MedPAC Votes to Scrap MIPS

The Medicare Payment Advisory Commission (MedPAC) voted 14 to 2 on January 11^th in favor of telling Congress to do away with Merit-based Incentive Payment System (MIPS) (1). Instead they favor moving to what the panel termed a voluntary value program (2). Lawmakers mandated MIPS as part of the bipartisan 2015 Medicare Access and CHIP Reauthorization Act (MACRA) ending the sustainable growth rate formula that had repeatedly threatened to cause deep cuts in Medicare payments to doctors.

On a slide presentation before the vote, the MedPAC staff said MIPS cannot succeed. The cited the following reasons for MIPS’ probable failure (3):

• Replicates flaws of prior value-based purchasing programs
• Burdensome and complex
• Much of the reported information is not meaningful
• Scores not comparable across clinicians
• MIPS payment adjustments will be minimal in the first two years, large and arbitrary in later years
• MIPS will not succeed in helping beneficiaries choose clinicians, helping clinicians change practice patters to improve value, or helping the Medicare program to reward clinicians based on value

Supporters of the MedPAC approach argued for fast action. It will be difficult to dismantle MIPS if it becomes entrenched, said MedPAC panelist Rita Redberg MD (1).

One of the four physician members of the committee, Alice Coombs MD, an anesthesiologist and critical care specialist, dissented. "We have not seen one specialty physician group yet say, 'You know what, I like getting rid of MIPS and I like this [Voluntary Value Program], let's go with it.' " The American Medical Association (AMA) protested the MedPAC vote arguing to keep MIPS in place (1). "Where we are is that we'd like to fix it rather than kill it," Sharon McIlrath, assistant director of federal affairs at the AMA, told the MedPAC panelists during the public comment period. The AMA separately issued a statement from its president, David O. Barbe MD (1). "The best remedy is to fix MIPS rather than jumping into another sweeping change that has not been fleshed out and would have many of the same methodological issues as MIPS," Barbe said.

It's unclear how Congress and CMS will greet the MedPAC recommendation on MIPS. Congress in recent months has struggled with healthcare legislation, for example, reauthorization of the Children's Health Insurance Program. Routine appropriations have not yet been completed for fiscal 2018, The AMA's McIlrath told MedPAC that it doesn't appear "politically viable to think that you are going to go up there and think that you are going to get the Hill to kill MIPS (1)."

Richard A. Robbins, MD

Editor, SWJPCC

References

1. Young KD. MedPAC backs bid to scrap MIPS Medicare pay system amid dissent. Medscape. January 11, 2018. Available at: https://www.medscape.com/viewarticle/891240 (accessed 1/13/18).
2. Robbins RA. CMS announces new payment model. Southwest J Pulm Crit Care. 2018;16(1):29-30. Available at: /news/2018/1/11/cms-announces-new-payment-model.html (accessed 1/13/18).
3. Bloniarz K, Winter A, Glass D. Assessing payment adequacy and updating payments. Available at: http://www.medpac.gov/docs/default-source/default-document-library/jan-2018-phys-mips-public.pdf?sfvrsn=0 (accessed 1/13/18).

Cite as: Robbins RA. MedPAC votes to scrap MIPS. Southwest J Pulm Crit Care. 2018;16(1):42-3. doi: https://doi.org/10.13175/swjpcc010-18 PDF 

CMS Announces New Payment Model

On Tuesday, 1/9/18, the Centers for Medicare and Medicaid (CMS) announced a new voluntary bundled-payment model that will be considered an advanced alternative payment model under Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) (1). The new model is the first advanced Alternative Payment Model (APM) to be introduced by the Trump administration. The Trump administration has been a vocal advocate of reducing administrative burden for clinicians and has touted voluntary models as a solution (2). The new, voluntary model comes less than two months after the CMS officially decided to eliminate two mandatory bundled-payment models created during the Obama administration.

Under the model, clinician payment will be based on quality measures during a 90-day episode of care. Participants must select at least one of the 32 clinical episodes to apply to the model. The inpatient clinical episodes are listed in Table 1 (3).

Table 1. Clinical inpatient episodes under proposed payment model.

• Acute myocardial infarction
• Back & neck except spinal fusion
• Cardiac arrhythmia
• Cardiac defibrillator
• Cardiac valve
• Cellulitis
• Cervical spinal fusion
• COPD, bronchitis, asthma
• Combined anterior posterior spinal fusion
• Congestive heart failure
• Coronary artery bypass graft
• Double joint replacement of the lower extremity
• Fractures of the femur and hip or pelvis
• Gastrointestinal hemorrhage
• Gastrointestinal obstruction
• Hip & femur procedures except major joint
• Lower extremity/humerus procedure except hip, foot, femur
• Major bowel procedure
• Major joint replacement of the lower extremity
• Major joint replacement of the upper extremity
• Pacemaker
• Percutaneous coronary intervention
• Renal failure
• Sepsis
• Simple pneumonia and respiratory infections
• Spinal fusion (non-cervical)
• Stroke
• Urinary tract infection

Providers will be eligible for bonuses based on their performance. For more information about the model and its requirements, or to download a Request for Applications document (RFA), the application template, and the necessary attachments, please visit: https://innovation.cms.gov/initiatives/bpci-advanced. Applications must be submitted via the Application Portal, which will close on 11:59 pm EST on March 12, 2018. Applications submitted via email will not be accepted.

The CMS Innovation Center will hold a Q&A Open Forum on Tuesday, January 30, 2018 from 12 pm – 1 pm EDT. This event is open to those who are interested in learning more about the model and how to apply. Please register in advance here - https://preaward.adobeconnect.com/e3cdwg6hgx9f/event/registration.html.

Richard A. Robbins, MD

Editor, SWJPCC

References

1. Centers for Medicare and Medicaid Services. CMS announces new payment model to improve quality, coordination, and cost-effectiveness for both inpatient and outpatient care. January 9, 2018. Available at: https://www.cms.gov/Newsroom/MediaReleaseDatabase/Press-releases/2018-Press-releases-items/2018-01-09.html (accessed 1/10/18).
2. Castellucci M. CMS launches new voluntary bundled-payment model. Modern Healthcare. January 9, 2018. http://www.modernhealthcare.com/article/20180109/NEWS/180109905 (accessed 1/10/18).
3. Centers for Medicare and Medicaid Services. BPCI Advanced. January 9, 2018. Available at: https://innovation.cms.gov/initiatives/bpci-advanced (accessed 1/10/18).

Cite as: Robbins RA. CMS announces new payment model. Southwest J Pulm Crit Care. 2018;16(1):29-30. doi: https://doi.org/10.13175/swjpcc006-18 PDF 

Varenicline (Chantix®) Associated with Increased Cardiovascular Events

Researchers from Canada published on-line a study linking varenicline with increased cardiovascular events on December 20, 2017 in the American Journal of Respiratory and Critical Care Medicine (1). They found new varenicline users had a statistically significant 34% increased incidence of cardiovascular hospitalizations and emergency department visits while taking the medication.

This finding was consistent in numerous subgroup and sensitivity analyses with different types of patients, different outcome definitions and different risk and control intervals. They also observed a questionably clinically significant 6% increase in the incidence of neuropsychiatric hospitalizations. The cardiovascular findings are in contrast to previous studies which reported no difference or a decrease in cardiovascular events (2,3). The authors advise weighing the health benefits of smoking cessation against any potential cardiovascular events related to varenicline.

Richard A. Robbins, MD

Editor, SWJPCC

References

1. Gershon AS, Campitelli MA, Hawken S, Victor C, Sproule BA, Kurdyak P, Selby P. Cardiovascular and neuropsychiatric events following varenicline use for smoking cessation. Am J Respir Crit Care Med. 2017 Dec 20. [Epub ahead of print]. [CrossRef] [PubMed]
2. Kotz D, Viechtbauer W, Simpson C, van Schayck OC, West R, Sheikh A. Cardiovascular and neuropsychiatric risks of varenicline: a retrospective cohort study. Lancet Respir Med. 2015; 3(10):761-8. [CrossRef] [PubMed]
3. Sterling LH, Windle SB, Filion KB, Touma L, Eisenberg MJ. Varenicline and adverse cardiovascular events: a systematic review and meta-analysis of randomized controlled trials. J Am Heart Assoc. 2016; 5(2). pii: e002849. [CrossRef] [PubMed]

Cite as: Robbins RA. Varenicline (Chantix®) associated with increased cardiovascular events. Southwest J Pulm Crit Care. 2018;16(1):15. doi: https://doi.org/10.13175/swjpcc003-18 PDF 

Tax Cuts Could Threaten Physicians

Today (December 13) members of the House and Senate will meet to reconcile differences between their two tax reform proposals. Congress is expected to complete work on the bill before the Christmas recess. Although many are overjoyed by a tax cut, there are potential pitfalls to the tax cut that might adversely affect physicians.

Under a rule in the Senate known as Pay as You Go (PAYGO), legislation that increases the deficit results in automatic spending cuts. The Congressional Budget Office (CBO) estimates that tax cuts could lead to automatic cuts of $136 billion in fiscal 2018, $25 billion of which would come from Medicare. PAYGO cuts would reduce Medicare payments to physicians by 4% in 2018 according to the American College of Physicians (ACP) (1). PAYGO would also lead to cuts to graduate medical education, lab fees, and hospital payments and would cut or entirely eliminate hundreds of other federal programs, including programs within the Centers for Disease Control and Prevention, the Health Resources and Services Administration, and the Prevention and Public Health Fund, according to the ACP.

Senate Republicans want to essentially repeal the penalty that accompanies the mandate that all Americans buy health insurance. It seems likely that House Republicans will go along. The CBO estimates that this would decrease the number of people with health insurance by 4 million by 2019 and premiums in the nongroup market by about 10% in almost each year for the next 10 years. The American Association of Retired Persons (AARP) says that 64-year-olds could see their premiums increase by an average of $1490 a year (2).

The medical expense tax deduction has been targeted for elimination by the House. The Senate version, however, would keep the deduction. The AARP says that in 2015, 8.8 million Americans used the deduction and that more than half were older than 65 (2). Nearly three quarters are 50 years old or older and live with a chronic condition or illness, and 70% of those who claimed the medical expense deduction have income below $75,000, according to the AARP. However, the tax deduction seems likely to survive. Rep. Kevin Brady (R-TX) who heads the reconciliation said he's willing to consider scrapping the proposal to eliminate the deduction (3).

The House is proposing to eliminate a tax credit that has been used as an incentive for pharmaceutical companies to develop therapies for orphan diseases. The Senate is reducing that credit. Not surprisingly, the National Organization for Rare Disorders and 160 other organizations representing patients with rare conditions oppose any reduction (4). They argue that eliminating the tax cut would deincentivize pharmaceutical companies to develop therapies for orphan diseases where the market is usually small.

Hospitals are alarmed about the House proposal to eliminate tax-exempt private activity bonds used by nonprofit hospitals and academic medical centers. The Senate bill would continue to allow that tax-exempt financing. This is opposed by both the Association of American Medical Colleges and the American Hospital Association (5,6).  The AHA’s Thomas P. Nickels states, "The ability to obtain tax-exempt financing is a key benefit of hospital tax-exemption that works to make access to vital hospital services available in communities large and small across America." (6).  Locally several medical centers have large bonds and loss of the exemption might have significant consequences.

Richard A. Robbins, MD

Editor, SWJPCC

References

1. Ende J. Letter to Mitch McConnell and Charles Schumer. November 30,2017. Available at: https://www.acponline.org/acp_policy/letters/senate_tax_cuts_and_jobs_act_2017.pdf (accessed 12/13/17).
2. Strauss G. AARP opposes senate tax bill. November 30, 2017. Available at: https://www.aarp.org/politics-society/advocacy/info-2017/senate-letter-tax-fd.html?intcmp=AE-HP-FLXSLDR-SLIDE1?intcmp=AE-HP-FLXSLDR-SLIDE1-RL1 (accessed 12/13/17).
3. Ault A. Five things in the GOP tax plan that threaten medicine. Medscape. December 12, 2017. Available at: https://www.medscape.com/viewarticle/889947?nlid=119526_4502&src=wnl_dne_171213_mscpedit&uac=9273DT&impID=1507630&faf=1#vp_2 (accessed 12/13/17).
4. Letter to Congress. December 7, 2017. Available at: https://rarediseases.org/wp-content/uploads/2017/12/Orphan-Drug-Tax-Credit-Conferee-Letter-Final.pdf (accessed 12/13/17).
5. AAMC. AAMC statement on house tax reform legislation. https://news.aamc.org/press-releases/article/house_tax_reform_11092017/ (accessed 12/13/17).
6. Nickels TP. Letter to Rep. Kevin Brady. December 8, 2017. Available at: http://www.aha.org/advocacy-issues/letter/2017/171208-letter-taxbill-conferees.pdf (accessed 12/13/17).

Cite as: Robbins RA. Tax cuts could threaten physicians. Southwest J Pulm Crit Care. 2017;15(6):280-1. doi: https://doi.org/10.13175/swjpcc153-17 PDF 

Trump Nominates Former Pharmaceutical Executive as HHS Secretary

President Trump on Monday announced Alex Azar, a former pharmaceutical executive, as his choice to succeed Dr. Tom Price as secretary of Health & Human Services (HHS) (1). HHS is an 80,000-employee federal agency that oversees the Centers for Medicare and Medicaid Services, the Food and Drug Administration, the National Institutes of Health, and the Centers for Disease Control and Prevention. Price resigned in September following reports of his extensive use of government and charter air travel.

Azar, a lawyer, formerly headed Eli Lilly & Co.'s U.S. division. Before that, he served as HHS general counsel and deputy secretary during the George W. Bush administration. During that stint, he received praise for his management competence. Azar "will be a star for better healthcare and lower drug prices!" Trump tweeted.

Andy Slavitt, CMS administrator under the Obama administration, also a lawyer and former United Healthcare executive, offered cautious praise for Azar. "I have reason to hope he would make a good HHS secretary," Slavitt said in a written statement. "He ... has real-world experience enough to be pragmatic, and will hopefully avoid repeating the mistakes of his predecessor in over-politicizing Americans' access to healthcare."

If confirmed, Azar would inherit an agency currently torn by political and policy divisions in the wake of Price's departure (2). He will have to make key decisions to avoid further disruption in the individual health insurance market; how much leeway to give states to make big changes in their Medicaid expansion program; and face pressure to address rising prescription drug costs. One management issue Azar would quickly face is how to deal with Price's ambitious Reimagine HHS initiative to streamline the department's operations and with the White House’s proposal to slash the HHS' budget for 2018 by 18%.

Azar has been a sharp critic of the Affordable Care Act, saying in May that the ACA is "fundamentally broken" and "circling the drain." In June, he envisioned the Trump administration shifting the ACA in a more conservative direction even without repeal and replacement of the law. He also has opposed reducing prescription drug prices or allowing purchasing drugs from other countries where prices are lower.

If confirmed, Azar will represent a return to the recent tradition of selecting Secretaries of HHS with no medical background. Before, Price, only Dr. Otis Bowen (1985-9) and Dr. Louis Sullivan (1989-93) were physicians of the 11 non-interim Secretaries.

Richard A. Robbins, MD

Editor, SWJPCC

References

1. Meyer H. Can Trump's pick to lead HHS navigate the churning political waters of healthcare? Modern Healthcare. November 13, 2017. Available at: http://www.modernhealthcare.com/article/20171113/NEWS/171119968?utm_source=modernhealthcare&utm_medium=email&utm_content=20171113-NEWS-171119968&utm_campaign=am (accessed 11/14/17).
2. Pradhan R, Diamond D. Price investigation continues to roil HHS. Politico. November 13, 2017. Available at: https://www.politico.com/story/2017/11/13/tom-price-private-jets-probe-hhs-244793 (accessed 11/14/17).

Cite as: Robbins RA. Trump nominates former pharmaceutical executive as HHS secretary. Southwest J Pulm Crit Care. 2017;15(5):221-2. doi: https://doi.org/10.13175/swjpcc140-17 PDF