U.S. GAO- Government Accounting Office- uncovers secrecy on medical device prices

LINK HERE to full story by Star Tribune reporter James Walsh

Secrecy on medical-device prices hurts buyers, GAO says

•                Article by: JAMES WALSH

•                Star Tribune

•                February 11, 2012 - 2:40 PM

Hospitals are paying widely varying prices for the same implantable medical devices, according to a new study that suggests that secretive sales agreements prevent many buyers from getting the best deals.

The report from the U.S. General Accounting Office -- which turned up a difference of more than $8,000 for one cardiac device alone -- found that confidentiality clauses in sales contracts keep even the physicians who decide which devices to use in the dark about prices.

The study, which was requested by U.S. Sen. Max Baucus, a Montana Democrat who chairs the Senate Finance Committee, could add fuel to a push to lift the price veil.

"The real problem is that, on the local level, there are these gag clauses that prohibit the sharing of pricing information," said Curtis Rooney, president of the Healthcare Supply Chain Association (HSCA). "I do think [the GAO report] lays the groundwork for more questions to be asked."

Don May, vice president of policy for the American Hospital Association, said the study "highlighted some of the real concerns about devices."

Device pricing is an issue of critical importance locally. Minnesota is a primary medical technology hub, home to industry giants Medtronic and St. Jude Medical and hundreds of other smaller companies employing thousands of people.

Officials with top local device companies declined to comment on the GAO's findings, referring calls to the Advanced Medical Technology Association (AdvaMed), a medical device trade association.

David Nexon, a senior executive vice president for AdvaMed, said the industry is extremely competitive and that pricing involves many factors. Overall, however, he said that medical technology prices "have risen far more slowly than price increases for other medical goods and services and substantially less than even general price increases in the economy as a whole."

Nexon did not specifically address confidentiality clauses. But he said prices reflect "the number of competitors in the marketplace, a particular hospital's volume of business in a particular procedure and the volume of other products sold to that hospital by a manufacturer."

As the GAO report noted, hospitals typically negotiate device prices with manufacturers directly or through group purchasing organizations (GPOs). But device manufacturers often require hospitals to sign confidentiality clauses that forbid them from revealing to third parties the price they paid. Those third parties often include physicians, whose device preferences influence hospital purchasing decisions.

"It really is this relationship between the manufacturer and the physician," Rooney said. "The physician orders the product but can't know what the price is. The hospital becomes the third-party payer."

The GAO sought information for its study from more than five dozen medical centers and others involved in the health care system. It received detailed information on cardiac device prices from 31 hospitals, one GPO and one Department of Defense medical center. Only 14 hospitals and two Department of Defense facilities gave detailed information on orthopedic devices.

Those responses showed huge price differences. For example, the difference between what the lowest- and highest-price hospitals paid for a particular model of automated implantable cardioverter defibrillator (AICD) was $6,844. For another, the price difference was $8,723. Median prices for four AICD models ranged from $16,445 to $19,007.

The cost to the government alone could be substantial. Considering that Medicare spent nearly $20 billion on implantable medical device hospital procedures in 2009, a rate equal to what Medicare spent for all other hospital procedures, "excess or unnecessary IMD costs that hospitals incur may be passed on to the Medicare program," the GAO report said.

'Armed for battle'

There are hospitals that go in with their eyes open.

Minneapolis-based Allina Health won't accept gag clauses in its contracts, according to Cheryl Harelstad, vice president for supply chain management. Years ago, she said, such clauses weren't really questioned.

"A lot of health care providers are working hard, saying, 'Wait a minute. This doesn't put us in a very good position,'" she said.

Allina belongs to a GPO, Novation, that strikes agreements with suppliers and establishes multiple price tiers for devices, Harelstad said. GPO members pay a fee for that information and sharing it is critical, she said. Allina, which has some buying clout because of its size, will then go to manufacturers to adjust prices further.

"We go in armed for battle," Harelstad said of the importance of pricing information.

"To be fair," she said, "our suppliers work well with us on this."

Rooney said confidentially clauses in device contracts are not new. "This has been going on quite a while -- at least a decade," he said. Legislation requiring more price transparency was introduced in Congress in 2007, but was not enacted.

Now, as more Americans age and health care costs become an even bigger issue, Rooney said the issue of device costs is heating up again.

"This begins the conversation that needs to occur in Congress," he said. "In the era of cost containment, people should know they are getting the value they deserve in terms of health care costs. People are getting older and grayer, and more of these devices will be implanted."

James Walsh • 612-673-7428

 

explanthisFeb. 12, 128:07 AM

http://fida-advocate.blogspot.com/ FDA MedWatch Adverse Event #5009052 was not investigated and according to Freedom of Information, the record was "lost". Mayo Clinic and the surgeon/designer are legally able to abandon the patient. The entitlement of the medical device industry will cripple not only our elders, but our nation. Medical and legal purgatory is not an "innovation" that patients demand but if a device fails, that is the result. No pre-market clinical testing, mass production and no registry for devices and an uninformed consumer is the recipe for disaster. Is the GAO report "shrill" or accurate? I vote for accurate!

Consumers Union announcement of hospital rating data availability

CONSUMERS UNION NEWS RELEASE

For Immediate Release:  Wednesday, February 1, 2012

Contact:  Michael McCauley – mmccauley@consumer.org, 415-902-9537 (cell) or 415-431-6747, ext 126 (office) or Lisa McGiffert, lmcgiffert@consumer.org, 512-477-4431, ext 115

Central Line Bloodstream Infections Disclosed at Hospitals Nationwide   

Infection Disclosure Is A Milestone Following A Multi-Year Campaign

By Consumer Advocates to Make Information Public

WASHINGTON, D.C. – The Department of Health & Human Services is now disclosing for the first time how hospitals across the country compare when it comes to central line associated bloodstream infections (CLABSIs) in intensive care units.   CLABSI information for each hospital is posted on the federal Hospital Compare web site and will be updated quarterly.  The web site will provide information for other hospital-acquired infections in the future.

National hospital infection reporting follows a multi-year campaign by Consumers Union and other consumer advocates to mandate such disclosure.  The Centers for Disease Control & Prevention (CDC) estimates that nearly 100,000 people die each year due to hospital-acquired infections and the hospital costs associated with these infections are estimated to be as high as $45 billion annually. 

“Consumer advocates across the nation have worked tirelessly to end the secrecy over hospital infection rates,” said Lisa McGiffert, director of Consumers Union’s Safe Patient Project (www.SafePatientProject.org).  “This is a milestone for patient safety that begins to make hospitals accountable for the two million patients who are infected each year.   Finally, Americans in all 50 states will be able to find out how well their hospital prevents these particular infections.  Public disclosure drives hospitals to improve care and helps patients choose hospitals with better safety records.”

Consumers Union, the nonprofit advocacy arm of Consumer Reports,  has prepared a set of tips for accessing the CLABSI information on Hospital Compare web site.   

Since 2004, Consumers Union has worked with a national network of consumer advocates to enact hospital infection reporting laws and helped pass such requirements in thirty states.  The majority of those state laws were based on Consumers Union’s model hospital infection reporting law.  Since launching the Safe Patient Project, Consumers Union has heard from thousands of patients harmed by infections who joined the campaign to push for reform.    
Beginning in January 2011, the federal government’s Medicare payment policies have required hospitals to report to the CDC’s National Healthcare Safety Network (NHSN) when patients develop CLABSIs in intensive care units. The NHSN is the same system used by most of the states with reporting mandates. 
The CDC estimated that 18,000 patients developed CLABSI infections in the ICU in 2009.  Of those patients who develop bloodstream infections in the hospital, up to one in four die. 
The CLABSI infection information disclosed on Hospital Compare are based on only three months of data (January-March 2011) and show how each hospital stacks up against the national benchmark for such infections.  But building a longer record over the coming year will provide a better indication of trends at each hospital. 
“If your hospital is no different than the national benchmark, that means too many patients are still suffering and dying from infections that could have been prevented with better care,” said McGiffert.  “The benchmark for success that hospitals should be striving to reach is zero.”    
Hospitals have started reporting surgical site infection rates to the CDC and that information will be posted on Hospital Compare every quarter beginning in 2013, starting with abdominal hysterectomy and colon surgeries.  According to the CDC, surgical site infections account for 20 percent of all hospital acquired infections.  In addition, information on the incidence of catheter-associated urinary tract infections will be available on Hospital Compare in 2013.
The new reporting requirements apply to hospitals that participate in the Centers for Medicare and Medicaid Services (CMS) “pay-for-reporting” program and includes infections occurring in all patients, not just Medicare patients. Virtually all U.S. hospitals, excluding critical access hospitals, participate because they earn a higher Medicare payment for doing so.  

See Consumer Reports’hospital survival guide for advice on staying safe in the hospital. For information on more than 3,000 hospitals in all states, including infection Ratings for over 1,000 hospitals, see Consumer Reports Ratings (available to Consumer Reports subscribers).  Or try the new Consumer Reports hospital Ratings app which can be downloaded from the iTunes app store for $2.99.

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Study finds improved patient health care delivery a must for orthopedic surgeons

Chair of Orthopedic Surgery at Mayo Clinic: Daniel J. Berry

Study finds improved patient health care delivery a must for orthopedic surgeons

ORLANDO, Fla. — For the specialty to survive, orthopedic surgeons must provide patients with new methods ofhealth care delivery in the form of improved safety, value and care, according to a presentation at the Current Concepts in Joint Replacement 2011 Winter Meeting, here. “We will not thrive as a profession if the population cannot afford our care,” Daniel J. Berry, MD, said. In his presentation, Berry, who chairs the orthopedic department at the Mayo Clinic in Rochester, Minn., outlined five ways that he believes orthopedic medicine can “out distance” other specialties: innovations in patient safety, fostering research and development, creating affordable and accessible care, improving quality of work, and attracting the best talent to the profession.

The tendency to rush to adopt new technology has hurt the specialty in the past, Berry noted, citing the recent metal-on-metal hip implant recalls as an example of this problem.

The public is also aware of these controversies, he said. Berry also mentioned that surgeons should collectively fight for more funds for musculoskeletal research, noting that such scientific efforts are under-funded in orthopedics compared with other medical professions, despite the prevalence of orthopedic care throughout our society. “We keep people working [and] we keep them independent,” Berry said. Reference: Berry DJ. Optimizing health care delivery: best in class. Paper #35. Presented at the Current Concepts in Joint Replacement 2011 Winter Meeting. Dec. 7-10. Orlando, Fla. Disclosure: Berry receives royalties from DePuy.

Health Leaders article: Docs Need to Blow the Whistle on Fraud

Doctors need to blow the whistle on fraud. (Link to Health Leaders/Joe Cantalupe article)

Docs Need to Blow the Whistle on Fraud

Joe Cantlupe, for HealthLeaders Media , December 15, 2011

Without skipping a beat, a huge medical device manufacturer allegedly found an easy way to influence physicians to use that company's brand of defibrillators and pacemakers.

How? By giving doctors kickbacks, the Justice Department says.

In a settlement agreement reached this week, Medtronic Inc. of Fridley, MN, agreed to pay $23.5 million to resolve allegations that it used physician payments as kickbacks to "induce doctors" to implant the company's products.

Daniel R. Levinson, inspector general of the U.S. Department of Health and Human Services, noted in a statement, "Patients trust that decisions to implant certain pacemakers or other medical devices are based on their own health interests and not influenced by kickbacks."

This kind of news can certainly erode patients' trust in doctors. And there's more.

The Justice Department's announcement about the Medtronic settlement was barely 24 hours old when, in a separate, unrelated case, several dozen federal and state investigators swooped into a radiology and diagnostic facility in Orange, NJ, arresting 13 doctors and a nurse practitioner in a cash-for-tests referral scheme.

"When physicians take kickbacks that influence how they practice medicine, it has the potential to taint the medical advice and care that is provided to their patients," Office of Inspector General Special Agent Tom O'Donnell said in an official statement.

Bribes and kickbacks are only part of the problem in healthcare fraud, which includes identity theft, illegal prescription drug sales, and countless other areas of wrongdoing. These transgressions do occasionally involve doctors.
The wrongdoing at Medtronic unraveled after two whistleblowers sued the company and alerted authorities to the problem, according to the Justice Department.

Because of their role, the do-gooders will receive a tidy sum of more than $3.96 million. Neither whistleblower was a physician. Justice Department officials declined to comment when I asked how many physicians may have been involved in the Medtronic case.

That's too bad. Physicians need to step up to ferret out fraud, not be a part of it. Most are honest, upholding the profession's reputation. The actions of a few can cast a long, foreboding shadow on the legions of honorable practitioners.

Shortly after he resigned as head of CMS, Don Berwick, MD, touched on the fraud issue in a conversation with journalists. In his 18-month tenure, Berwick said he found that fraud, waste, and abuse were more significant problems than he previously thought. Apparently, Berwick didn't realize how widespread the problem really is.

That's surprising. There were plenty of clues before Berwick stepped into his office in April 2011 that fraud was a big and burgeoning trouble spot in healthcare. Now that he has left, CMS appears to be struggling still with how to uncover fraud, as the behemoth agency tries to raise quality standards under healthcare reform, while also dealing with inadequate data systems that would improve its watchdog functions (more on that in a moment).

As for Berwick, one federal official who is knowledgeable about these decisions told me the CMS leader "was concentrating on other things," such as forming Accountable Care Organizations.

It seems that fraud in Medicare and Medicaid will be a major challenge for Berwick's successor to overcome. Federal officials want physicians to play an instrumental role in helping to stop fraud, and they're backing up that desire with the power of the dollar. Healthcare reform provides fiscal incentives to do so. Berwick had estimated that fraud, waste, and abuse total about $30 billion a year for the whole healthcare system, including up to $10 billion just within CMS.

The week Berwick talked about fraud with journalists, Gary Cantrell, assistant inspector general for the Office of Inspector General (OIG) at HHS, addressed the extent of Medicaid fraud in Congressional testimony. His comments didn't make headlines, but they were revealing nevertheless, as he described the widespread scope of Medicaid fraud, including prescription drug abuse and problems in the home health care services arena.

"We are now seeing more Medicaid fraud cases involving home health services than any other single program area," Cantrell told two House subcommittees. One investigation of a leading home health services company, Maxim Healthcare Services, led to a $150 million settlement of fraud charges.

Fraud in home health services is not a new problem. There have been repeated warnings that CMS needs to address the issue.

"Auditors have been concerned about fraud in home health care for years, but the problem never seems to get solved," according to a 2009 report from the Cato Institute, a think tank in Washington, D.C.

As in Medicare, Cantrell identified "persistent fraud trends" involving misuse of prescription drugs in Medicaid. He referred to a case in Washington state in which a physician established connections with local heroin users and wrote medically unnecessary prescriptions for narcotics, including Oxycodone and Vicodin.

Cantrell also revealed that the OIG has a list of the 10 "most wanted" healthcare fugitives. Among them: an Illinois physician, Gautam Gupta, MD, sought for allegedly defrauding Medicaid and private insurance companies of more than $24 million, through weight loss clinics.

Whether it's improper billing procedures or weight loss fraud, Medicaid investigations are hampered by a lack of "national-level, timely Medicaid data," he says. While the Medicare databases are efficient, Medicaid's Medicaid Statistical Information System (MSIS) is the only source of nationwide Medicaid claims, but it is typically 1½ years old when released by CMS to users for data analysis purposes, which renders it ineffective for investigative purposes. "In law enforcement, a 1½-year time lag is an eternity," Cantrell says.

Essentially, the OIG is waiting for CMS to get its act together.

In the meantime, Cantrell says he's hoping that providers and patients get more involved in thwarting fraud. The OIG's website offers a tip line for fraud cases. And the OIG recently published a white paper, A Roadmap for New Physicians: Avoiding Medicare and Medicaid Fraud and Abuse.

This roadmap offers a journey worth taking, because the integrity of the profession is at a crossroads.

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Joe Cantlupe is a senior editor with HealthLeaders Media Online. He can be reached atjcantlupe@healthleadersmedia.com.

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Lawsuit: Public Citizen represents patients' right to criticize dentist.

PUBLIC CITIZEN PRESS RELEASE:

For Immediate Release:                                                                Contact: Angela Bradbery (202) 588-7741

Nov. 30, 2011                                                                                                       Dorry Samuels (202) 588-7742

 

Requiring Patients to Give Up Right to Criticize Medical Practitioners Is Unconscionable, Lawsuit Says

 

Public Citizen Represents Maryland Man in First-of-Its-Kind Suit Against New York Dentist

 

WASHINGTON, D.C. – A New York dentist’s requirement that patients sign a contract agreeing not to criticize her is unconscionable, and the dentist should be prohibited from forcing patients to make such a promise in the future, Public Citizen said in a lawsuit filed late Tuesday.

 

The suit highlights a growing trend: doctors and dentists conditioning medical care on patients promising not to post negative comments about them online. The pledges are contained in paperwork that patients must sign before the doctor or dentist will see them. Public Citizen represents Robert Allen Lee, a Huntingtown, Md., resident and former patient of the New York dentist, Dr. Stacy Makhnevich.

 

A North Carolina company called “Medical Justice” sells forms containing these conditions to medical providers, marketing the forms as an effective way to prevent negative comments that may have an adverse effect on their practices. Medical Justice has been quoted as claiming that about 3,000 doctors and dentists use its products, including these forms. This lawsuit is believed to be the first over the provision restricting criticism. 

 

Moreover, the provision the dentist required the patient to sign in the case purported to give the dentist ownership of the criticism through a copyright clause. And Makhnevich has claimed that by posting criticism online, Lee was violating the copyright clause and so owes Makhnevich $100 a day.

 

“What began as a case of a sore tooth is now showcasing an unconscionable practice in which doctors and dentists force patients to leave their constitutional rights at the office door,” said Paul Alan Levy, the Public Citizen attorney representing Lee. “If people are upset about their care, they have a First Amendment right to tell people about it – by going online and posting their thoughts on Yelp, Facebook, Twitter and the like.”

 

The case began in October 2010, when Lee developed a severely sore tooth. The next month, he went to Makhnevich, whom he selected because the practice was covered by his insurance. Before he could be treated, he was handed forms to sign. One of them required Lee to agree not to publish any commentary about the dentist, not to disparage the dentist and to assign copyright to the dentist for any commentary that Lee wrote. Lee was reluctant to give up his right to publish commentary, but he was in severe pain and so signed the form.

 

Makhnevich billed Lee $4,766 for the dental work performed. Lee paid and asked the dentist to send the necessary paperwork to his insurance company, but the dentist sent the information to the wrong insurance provider. Lee then asked for his records so he could submit the claim himself; Makhnevich refused and instead referred Lee to a third party that demanded five percent of the total bill for copying the records.

 

In August 2011, Lee criticized Makhnevich on Yelp, DoctorBase and other online sites. The dentist then sent Lee a letter warning that Lee had violated the agreement and threatened to sue Lee for breach of contract and copyright infringement. The next month, Makhnevich contacted Yelp and DoctorBase and demanded Lee’s comments be removed. The review sites refused to remove the comments, because they regard purported copyright assignments as legally unenforceable. Makhnevich then sent invoices to Lee for $100 a day for copyright infringement in September and October, and sent another letter threatening to sue Lee.

 

This suit, which seeks class-action status, contends that the agreement Lee was required to sign is unconscionable and should be declared null and void. Further, requiring patients to surrender the right to publish truthful criticism violates medical practitioners’ duty to patients because they are placing their own interests above those of their patients. In addition, the agreement misuses copyright law to suppress expression.

 

“It is outrageous that a patient would have to sign away his constitutionally protected right to get treatment for a toothache,” Lee said. “I have to wonder what this dentist’s other patients have said to make her feel it was necessary to go to this extreme.”

 

Bruce Keller and Jeffrey Cunard of the New York-based law firm Debevoise & Plimpton LLP are co-counsel with Levy in the case.

 

A copy of the complaint is available at http://www.citizen.org/litigation/forms/cases/getlinkforcase.cfm?cID=706.

 

Mayo Clinic Elbow Replacement "opportunity".

Link to Mayo Clinic YouTube video about elbow replacement.

It takes a mighty good joint replacement to be better than no joint replacement at all.  Joint replacements are now the #1 expenditure of Medicare.

Where is the scientific evidence?  There is no public accessible post-market registry.  No plan to care for patients with the 20% or so failed joint replacements.  No legal requirement for the surgeons to notify the FDA of adverse events.  No warranty on product.  Cleared through 510(k) process that the IOM Institute of Medicine 7/29/11 stated does not protect the patient from unsafe and ineffective joint replacements.  Patient representatives/consumer representatives are restricted from full voting stakeholder position on FDA orthopedic medical device advisory panel.  Aggressive marketing direct-to-consume and no transparency in surgeons' financial incentives from the medical device industry.  How is this patient-centered?

'Occupy Health' Protesters at the Chamber of Commerce DC/Blue Cross

Link to 5 minute video of peaceful occupation on 11/14/11




Sadly, it has come to this . . .  healthcare is a "profit center" and an "industry" for the Chamber of Commerce.  Health care leaders do things FIRST, not necessarily ethically.

Respect must be earned.

Leadership is doing it first.  Wisdom is knowing the right thing to do. Integrity is doing the right thing. Character is doing it in the face of adversity. Grace is doing it even though the recipient appears undeserving.  
Servant-hood is doing it even if it's "below your pay grade". Generosity is doing it with no expectation of reward or acknowledgement.