Checking Up On Health: March 12, 2013


Benita Dodd  Vice President  Georgia Public Policy Foundation
Benita Dodd
Vice President
Georgia Public Policy Foundation

Health Policy Briefs

Compiled by Benita M. Dodd

As if you’re not sick about unemployment already: Federal authorities and industry experts say the link between the federal Affordable Care Act and layoffs is becoming more pronounced, according to a report in Becker’s Hospital Review. The Federal Reserve’s “beige book,” which analyzes the economic conditions across various Fed districts throughout the country, notes, “Employers in several districts cited the unknown effects of the Affordable Care Act as reasons for planned layoffs and reluctance to hire more staff.” Aside from hiring changes, some districts, including Atlanta, are experiencing shortages in compliance experts due to the law’s regulatory complexity. Atlanta also reported that higher health care costs have “contributed to a modest decline in consumer confidence” related to consumer spending and tourism. ObamaCare has also been blamed in layoffs at hospitals and health systems. An analysis from October 2011 through January 2012 found at least 60 hospital or health system layoffs announced layoffs, eliminating roughly 4,000 positions. Fifty-three percent of hospitals cited “reimbursement cuts” – largely Medicare reimbursement cuts releated to ObamaCare – as a reason.

It’s just money I: The federal government overpaid private Medicare Advantage plans by at least $3.2 billion from 2010 through 2012, according to a new Government Accountability Office (GAO) report. The Centers for Medicare & Medicaid Services pays the plans a predetermined amount per beneficiary, and that amount is adjusted for the enrollee’s health status through a risk score, which is a relative measure of the expected health care required for that beneficiary. CMS’ risk score adjustment was too low, resulting in the overpayments. The GAO urged CMS to use more information, such as additional beneficiary characteristics, when establishing risk-score adjustments. Becker’s Hospital Review reported in October 2012 that a study reported in the International Journal of Health Services found private Medicare Advantage insurers have been overpaid $282.6 billion since 1985.

It’s just money II: As of December 2012, the Centers for Medicare & Medicaid Services (CMS) reported collecting about $987.5 million of about $1.2 billion in Medicaid overpayments to the states that the Office of the Inspector identified in 147 audit reports. But $225.6 million is still outstanding, $144.8 million of it from Illinois, the OIG reported. Also, CMS had inadequate documentation to support another $7.1 million that it reported as collected. The OIG said CMS “had not always proceeded with the collection process in a timely manner.”

Shot in the arm for R&D: Nearly 1,000 biotech drugs and vaccines for more than 100 diseases are currently under development, according to a report released Monday by the Pharmaceutical Research and Manufacturers of America (PhRMA). They include a genetically modified virus-based vaccine for skin cancer; a recombinant fusion protein for treating Type 2 diabetes and asthma and leukemia treatments. These were among 907 new biologics under development that included 338 treatments for cancer; 134 vaccines for infectious diseases; 71 medicines for autoimmune disorders; and 58 treatments for cardiovascular disease. Source:

FDA takes on advertising: The Office of Prescription Drug Promotion (OPDP) is reorganizing its two primary advertising review divisions – professional and consumer – in an attempt to stay in line with companies’ promotions and provide close oversight of direct-to consumer advertising, which it described as “often the catalyst for patients initiating conversations with their physicians about their untreated or undertreated conditions.” The office has criticized pharmaceutical marketing companies for “misbranding, off-label, overstating the efficacy or minimizing the risks of a product, or the misuse of a color scheme, in one famous educational piece created for Novartis,” according to ODPD’s two primary division will now be called the Division of Advertising and Promotion Review I, and the Division of Advertising and Promotion Review II, reviewing promotional materials based on therapeutic class, instead of by professional or consumer.

New hope for stroke patients: Japan’s Sapporo Medical University said it will launch clinical trials of a stem cell treatment for the aftereffects of strokes, or cerebral infarction. Stem cells harvested from patients’ own bone marrow fluid will be administered intravenously for nerve regeneration. A study it launched in 2007 found all 12 participating patients showed improvements in their motor functions and more than half of them resumed their normal lives, according to the university. Physical rehabilitation is currently the only cure for the aftereffects of cerebral infarction; researchers hope to have a therapy within three years.

Bees and HIV: Researchers at Washington University School of Medicine in St. Louis, Mo., believe they have uncovered a vital step in developing a gel that may prevent the spread of HIV. Nanoparticles carrying a toxin found in bee venom can destroy human immunodeficiency virus (HIV), while leaving surrounding cells unharmed. Their hope is that in places where HIV is running rampant, women could use the gel as a preventive measure. Find out more here. Source: St. Louis Post-Dispatch

Imagine if you didn’t have to wait for lab tests to diagnose your ailment. DNA powder and gold nanoparticles have become the new hope for rapid point-of-care diagnosis of some of the world’s leading infectious diseases and could soon replace current expensive and time-consuming tests in labs. Scientists at the University of Toronto’s Institute of Biomaterials and Biomedical Engineering, successfully tested their method on several sexually transmitted diseases (STD) and malaria. A fast working diagnostic biosensor allows technicians to test for multiple diseases at once with one tiny sample, and with high accuracy and sensitivity. It rapidly detected gonorrhea, syphilis, malaria, and hepatitis B infections, and scientists say it could be used one day for over-the-counter test kits. Source:

Quotes of Note

“I think the cost estimate of ObamaCare is grossly understated. I think far more Americans are going to lose their employer-sponsored care because there are incentives for employers to drop their coverage and make their employees eligible for huge subsidies and exchanges. I think this is going to explode our deficit, I think this is going to lead to rationing. It will lead to rationing, lower quality of care.” – U.S. Sen. Ron Johnson (R-Wis.)

“The art of medicine consists in amusing the patient while nature cures the disease.” – Voltaire

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