Wednesday, June 1, 2011

Assembly Bill 369 (Huffman) re "stepwise" prescriptions

AB 369 (Huffman) will put the brakes on a favored method insurance companies use to control prescriptive medication. The method is "stepwise" prescribing and works like this: doctor Kindguy wants to prescribe the medication he believes will most likely relieve his patient's pain but finds that he is obstructed in so doing by the patient's insurance company which requires the doctor to try at least two lesser level, that is, cheaper medications, first. Doctors will be obliged to follow this pathway even against their own medical judgment and will retain medical liability while the lesser level medications are foisted upon hapless patients.

Huffman's bill will authorize physicians to decide how long a lesser level drug should be used and would restrict the insurance company from requiring patients to try more than two such medications. Insurance companies want to increase profits without increasing premium costs. This way allows them to shift the cost burden to medications. Pharmaceutical companies object because it makes their best, and sometimes their most expensive, medications less accessible. Physicians should be supportive of the legislation because it'll dispense with still another layer of utilization control.

This writer call the office of Speaker Perez and asked that AB 369 be sent to the floor for a vote.

Assembly Bill 310 (Ma) re "tiered pricing" of medications

Assembly Bill 310 (Ma) would put a stop to so-called "tiered pricing" of medications. Currently, an insured person may be required to make co-payment for prescribed medication. Usually the payment will be a fixed amount, that is, a fixed-dollar amount. Insurance companies want patients to pay more for some medicines than others, that is, not a fixed-dollar ammount, but a percentage of the cost. That means patients will pay more for certain medications than for others despite being insured. The percentage may rise or fall at the pleasure of the insurance company which may use this method to delay or defray outright raises in insurance premiums. AB 310 will limit the amount of co-payment that the insurance company can force subscribers to pay. At the time of this writing this legislation would target medications costing more than $150 per month.

Pharmaceutical companies favor the bill because it'll make their medications, especially the expensive ones, more accessible. Physicians should favor the bill because it'll remove one more layer of bureaucratic utilization control. Currently, physicians may prescribe the best medication for their patients only to find out that the insurance company for the patient has put the medication out of reach. Meanwhile, the physician retains medical liability.

Assemblywoman Fiona Ma previously carried AB 245 which would have required government agencies including the medical board to expunge unproved allegations against accused physicians from government websites. That bill did not pass. This one should.

This writer called Speaker Perez's office to request that AB 310 come to the floor for a vote.

Wednesday, April 6, 2011

OBAMACARE REVISITED

OBAMACARE, technically, the Affordable Care Act or ACA, is due for a revision, something we were originally told couldn't be done. In our previous piece on this subject, we pointed out flaws in Section 10320, the part of the ACA that creates an IPAB or Independent Payment Advisory Board. This part of Obamacare establishes the authority for an unelected group of bureaucrats, appointed by politicians, to have authority over what is payable and what isn't, including Medicare. Section 10320 poses danger to hospitals, their patients, and their doctors. It is a plain and simple alternative to classical rationing. It's the Obamacare answer to the Palin-protagonists whose fear of rationing began a hubbub that won't end. Senator John Cornym introduced legislation to repeal Section 10320. He has been joined by Congressional Representative Phil Roe. Sponsors and supporters include the American Hospital Association, the American Academy of Orthopedic Surgeons, and the American Osteopathic Association. The general objection is that Section 10320 sets up an unelected IPAB whose members will be responsible to their own patrons, the politicians who appointed them, and that the first casualty will be quality of care.

The rub is that there is a cadre of political activists who, while opposing Section 10320, don't necessarily want to repeal only that section if it means that the rest of the bill would survive. For this cadre it's an all-or-nothing game. Improving the bill is for this group a kiss of near-death since so doing might lessen the drive for total repeal.

The drive for repeal of the 1099 section, however, which would also improve the bill, appears headed for success. The ACA would require all business entities to file 1099 tax forms whenever they buy $600 or more of either goods or services. In the past 1099s were required for purchase of services, e.g., from sole proprietors. This provision applied to services only -- its expansion to goods, e.g., a laptop, was expected to bring in about $20 billion to government. The objections of local doctors' offices, their associations and unions, was joined into heartily by business interests of all kinds. So it looks like Congress agrees and anticipates the signature of President Obama on a repeal bill. Hence, we have a definite crack in the ice. A part of the ACA can be repealed or changed after all. Section 10320 should be next.

Disappointingly, it appears that Budget Chair Paul Ryan has been caught in a statement that would deceive the American voter about Medicare. Ryan announced in the WSJ a plan to provide what he sneakily called "premium support" for Medicare. The idea of "premium support" is to award Medicare recipients a pre-decided amount of money and then let the recipients find and purchase their own health care on the private market. The fiscal motivation is to reduce Medicare inflation. So far, so good. But Ryan couldn't resist saying that "Medicare beneficiaries will be enrolled in the same kind (bold added) of health care program that members of Congress enjoy." False, false, false! The program Members of Congress get pays them a fixed percentage of costs, hence, the amount rises if the costs rise. By contrast, the program for Medicare recipients would award only fixed costs that would not automatically go up if Medicare costs were to rise. The expectation is that Medicare costs would go up and leave the fixed costs mired in the dirt.

Ryan's explanation was either a big mistake or an attempt at deception. In any case, his explanation is wrong and will deservedly cost him credibility.

Tuesday, March 8, 2011

GETTING AROUND THE CORPORATE PRACTICE ACT

Hospitals may hire physicians to manage specialized departments. These physicians aren't hired to practice medicine since in California so doing violates the state's prohibition against the corporate practice of medicine. The purpose of this prohibition is to prevent hospitals from controlling doctors and to prevent doctors from being under the thumb of corporate hospital interests. An example would be hospitals that push doctors to discharge patients too soon to increase utilization and enhance the bottom line. Such complaints are taken seriously and may lead to investigation. Some hospitals have come under the gun for allowing unindicated and unnecessary surgeries to be done.

On the other hand, it is not a violation of the corporate practice act to hire a doctor to manage a group of specialists. The stated purpose is to make sure that staffing is covered around the clock, to make sure that the most highly qualified doctors are hired, and to optimize patient care by retaining professional management. That's the theory.

Here's what we've heard as a variation on the theme.

Hospital X hires a physician manager. His job is to hire as many specialists as he judges necessary to cover the hospital's promise of service to the community. His allocation or budget for this administrative job is, let's say, $100,000 per month or a total of $1,200,000 per year. This amount is not his take-home pay. He in turn is supposed to form a specialty group and hire the doctors who'll actually provide service. Let's say the administrator hires a group of doctors whose combined pay is $50,000 per month or $600,000 per year. The administrator is then entitled to the other $600,000 for himself.

Let's say the administrator-doctor judges that he'll need 6 doctors. He knows that he's allotting a total of $600,000 to pay for their services -- so that's $100,000 for each of the hired doctors. Now the trick is to hire them at less than the allotted $600,000. If the administrtor-doctor can hire them at $75,000 each, saving $25,000 from each one of them, he can pay himself $150,000 more than the $600,000 originally envisioned. He now gets $750,000. The actual treating doctors get $450,000. They are not hospital employees. They are employees of the owner or founder of the group. There is no violation of the corporate practice act.

There's nothing illegal in this arrangement. Since the hired doctors are unlikely to be skilled in collective or even solo bargaining through unions, they're easy prey. When they find out that they can unionize, they'll be afraid to make the move. Fear is key. Some doctors retained for this administrative role understand better than others how to hire doctors who'll be less likely to complain about hours, working conditions, or pay -- the tricks of the trade include understanding ethnic, gender, and family differences. In some cases the key to getting hired may be how little one will accept in payment or how much overtime one may be willing to contribute. Credentialing becomes secondary.

"Medical Red-lining, Economic Credentials for Physicians," is the title of my op-ed from the San Francisco Examiner, 12 January 1995. It tells one way that corporate entities select doctors -- by determining which ones spend the least on diagnostic testing and therapeutic options for their HMO patients. This piece was reprinted in The Congressional Record, Vol. 144, # 118, 9/9/98. The trouble is that hospitals have learned how to act like HMOs.

The Los Angeles Times in its edition of 5 March 2011 published this story by Sam Allen: "State controller finds more big public employee salaries, including $875,000 for hospital chief." Nancy Farber, CEO of the Washington Township Healthcare District with its major hospital in Fremont, is reported to have been paid total wages in 2009 of $873,598.

The next step should be to review departmental expenses to learn how each department's budget was distributed. This effort would require prying into what some recipients might consider private business. It could be discomforting. It should be done.

"As They Consolidate, Hospitals Get Pricier," by Julie Appleby, produced by Kaiser Health News in collaboration with The Washington Post, 9/26/10, tells us in the title what we need to know. Are some administrations paying out so much to executives that there's not enough left for actual medical and surgical care? On the other hand, if "pricier" is connected to "better," there would be less room for complaint.

"State Report: Even fewer bypass surgery deaths," by Tom Abate, San Francisco Chronicle, 4/08/09, points out that the average mortality rate for this surgery in California was 2.65 percent but that Washington Hospital in Fremont reported a mortality rate of 5.83 percent for one of its surgeons. The trouble is that statistics don't take into account individual variation on a case-by-case basis. The rub comes when one asks the inevitable question, namely, was quality of care sacrificed on a monetary altar of greed so that executive compensation could be raised?

San Francisco Chronicle, 3/09/11, states that one of the "biggest winners" in health care, "No. 1 on the list is Nancy Farber, the CEO if Washington Township Health Care District in Fremont, who took home $873,598 last year." Washingon Hospital has 339 beds. This piece then states that "by comparison, Mark Laret, who heads UCSF's 690-bed hospital system, was paid $748,616."

People need to know how the health care dollar is distributed. Are hospital CEOs more valuable to hospitals than their physicians, surgeons, and nurses? One may reasonably ask if there's any relationship of administrative compensation to contracted out services that skedaddle around the corporate practice act.

Monday, February 21, 2011

Wisconsin, Ohio and California

Governor Walker of Wisconsin is fighting hard to be recalled. His wish to follow former Gov. Gray Davis of California into political exile deserves to be honored.

Govenor Kasich of Ohio also evidently wants to be recalled although he doesn't know it yet. He should be obliged. Both Governors Walker and Kasich, once they recognized urgent fiscal situations, immediately sought to destroy collective bargaining.

The citizens of Wisconsin and Ohio deserve better than they're getting and should increase efforts to recall their respective governors. Since one of the issues is pensions, we need to ask this question: were either Gov. Walker or Gov. Kasich to retire today, what would their pensions be? Once we know that, we can decide whether we think their pensions need trimming.

While we're at it, we should ask if it's correct that in Ohio corporations have been released from over $100,000,000 in taxes. If that assessment is correct, then that situation needs to be addressed not only in Ohio and Wisconsin but in every other state where earmarks have been a staple of business life.

These issues impinge upon healthcare delivery. In California when Arnold Schwarzenegger followed Davis into office, his first step was to set aside as much of collective bargaining as he could and to ruin workers' compensation for injured workers. Schwarzenegger enabled insurance companies to use doctors without California licenses to overrule and deny care prescribed to injured workers by duly licensed California doctors. The assertion was that this step would save money for the state. In reality, businesses saved some money but the huge beneficiaries were the insurance companies who used and continue to use one slick trick after another to deny care to injured workers.

Injured workers in California have wrongfully been denied care that was won in collective bargaining. Thanks to collective bargaining, however, California's injured workers are not without power and the ability to fight back. Walker of Wisconsin and Kasich of Ohio want to go further. They want to strip the workers, injured and uninjured alike, of any power to fight back. Such a move would be a boon to insurance companies that will be enabled to deny care as though there were no tomorrow. For some injured workers, tomorrow vanished yesterday.

It is fair game for the governors to seek reforms in pensions and to advocate for cost-sharing in healthcare. The unions have already agreed to that. But that's not enough for Gov. Walker or Gov. Kasich. Their purpose is not to establish equity but to ruin the unions and to destroy collective bargaining. That is why they deserve to be recalled and, if possible, sent into retirement without pensions.

AFSCME, AFL-CIO, and the Union of American Physicians and Dentists have repeatedly picked up the gauntlet that Governor Schwarzenegger threw into the faces of honorably employed public servants. In 2006, AFSCME, AFL-CIO, passed a resolution stating that Utilization Review doctors should be licensed in the states where they practice. But even Gov. Schwarzenegger wasn't autocratic enough to try to rescind the right to bargain collectively. Walker and Kasich display an arrogance that even Terminator Arnie couldn't quite muster. The solution in California was for Schwarzenegger to run out his string and then to vote down his retainers. The solution in Wisconsin and Ohio is for citizens to agree that pension and healthcare adjustments are indicated. They should then recall Governors Walker and Kasich. There is a moral to the story: protection of our rights requires eternal vigilance.

Tuesday, January 4, 2011

PEER REVIEW: ON A COLLISION COURSE WITH FINANCE, USED TO SILENCE PHYSICIANS, DOCTOR RAO STANDS FIRM AGAINST THE ODDS.

by Robert L. Weinmann, MD

In the Superior Court of California, County of Alameda, a
peer review drama is unfolding. Petitioner R.V. Rao has taken on Washington Township Health Care District, Respondent, re its judicial review committee.

In a nutshell, a conflict is now in about its 8th year. The conflict arose after Dr. Rao questioned administrative proceedings in the hospital and indicated that conflicts of interest may exist between optimal medical care and profitability. Doctor Rao reported his findings to appropriate official agencies. The agencies found fault with the hospital and reportedly told the hospital that Rao had complained. Rao's confidential cover as a whistleblower was blown. This scenario set the stage for on-going conflict. At a judicial review hearing called "JRC1" or "Rao I" Doctor Rao was involuntarily terminated from the Washington Hospital medical staff. Eventually, there was a second peer review proceeding called "JRC2" or "Rao II."

The court document, # HG10540985, refers to the hearing as "JRC2" and "Rao II." Respondent Washington Hospital wanted "to strike portions of the Petition pertaining to the second peer review proceeding." The court document states that "the motion is DENIED."

The document stated that "the motion of Respondent Washington Township Health Care District to strike portions of the Petition of Petitioner R.V. Rao for Writ of Mandamus is DENIED in part and GRANTED in part."

The petition then indicates that a "second judicial review committee ... completed proceedings into charges made June 4, 2007 on June 5, 2010." The court document refers to "the first judicial review committee ... to terminate Petitioner's medical staff membership."

In reference to the 2nd hearing, Washington Hospital sought to "strike portions of the Petition pertaining to the second peer review proceeding." This motion was denied. What is the material that the hospital wanted to strike?

We know that Dr. Rao appeared as a discussant in the movie, Life For Sale, available on DVD and on-line as www.lifeforsalemovie.com.

I am personally on record about this movie, having stated that it "explores dangerous nooks and crannies of healthcare that until now have remained hidden from public view."

Rao appears in the movie as a discussant about peer review. Although he does not mention any hospital by name or present himself as any hospital's spokesperson, his comments have been taken as critical of Washington Hospital. The movie has had public viewing including 13 minutes of the movie shown at a Continuing Medical Education seminar on Sham Peer Review sponsored by the Union of American Physicians and Dentists and the University of California at Irvine.

In general the movie suggests that conflicts of interest may exist between optimal medical care and optimal financial gain. Some critics feel that Rao's participation in this movie solidified opposition against him.

In the meantime, Washington Hospital has made spectacular financial progress despite miserable economic times. The San Jose Mercury News' report by Matthew Artz, 12/27/10, states that the hospital's CEO, Nancy Farber, would get a salary increase from $614,000 per year to $632,000 with total compensation set at about $857,000 ($245,502 in performance bonuses). Washington Township health care district board member Bernard Stewart was quoted as saying "in my opinion it is hard to describe our CEO's performance this year as anything other than outstanding."

Meanwhile, in the Supreme Court of the State of New York, Appellate Division, Second Judicial Department, Anthony Colantonio, respondent, versus Mercy Medical Center, we have language stating that "the defendants were not entitled to immunity under 42 USC 11112 (a)..."

Doctor Colantonio was asked why his hospital was taking him on. Colantonio replied "I spent seven months writing letters about patient care issues that needed to be corrected. This was after two years of complaining verbally. I could no longer look the other way while patients were dying. They found my conduct 'disruptive.' "

Peer Review privacy, for which I personally have testified in the California legislature, is now under the gun and, regrettably, perhaps with good reason if it can be shown that the process is being subverted. The doctors in the Colantonio case are now subject to civil lawsuits since providing false testimony is not protected under the Health Care Quality Improvement Act.

At the same time, doctors who take on hospital administrations or who are felt to be too vigorous in their protests run the risk of being called "disruptive," which in turn can lead to hospital discipline and adverse reports to state medical boards (these reports are known as 805s in California).

In Rao's case, the court is being asked to undertake judicial review in order to overturn the termination order from the Washington Township Health Care District Board of Directors.

My opinion was stated at one of the hearings where I testified at Washington Hospital on behalf of Dr. Rao. I pointed out that had the doctors in Redding spoken out and questioned the administration as well as their own colleagues, the catastophic conduct reported to have occurred there -- including unnecessary operations -- would have been nipped in the bud.

Doctor Rao acted honorably. He should be exonerated and restored to full privileges at Washington Hospital.