Citizens’ Council on Health Care
CCHC HEALTH eNEWS
Monday, December 3, 2001


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Providing news and commentary on health care policy,
health insurance issues, and medical confidentiality.
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* CONGRESSMAN NORWOOD: RATIONING OF HEALTH CARE IN FULL SWING

* HHS: PRIVACY BREACHES NEED NOT BE DISCLOSED TO PATIENTS

* ADULT STEM CELLS CURE SICKLE CELL PATIENT

* MEDICAL COLLEGES WANT MORE ACCESS TO DATA FOR RESEARCH

* BIRTH DATA OF CALIFORNIANS SOLD & POSTED ONLINE

 COSTS TO DEVELOP NEW DRUGS SOAR

* COST OF OVER-RIDING PATENT DRUG PROPERTY RIGHTS (CIPRO)

* DEFINED BENEFIT RETIREMENT PLANS DISTORT STOCK PRICES


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* CCHC Commentary included
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RATIONING OF HEALTH CARE IN THE 21^st CENTURY

U.S. Representative Charlie Norwood (R-Georgia) spoke to the
Georgia Society of Clinical Oncology at their annual meeting.
His remarks are pointed. A few are listed below:

* “Every provider, every patient, every hospital in the country is reeling form the same disease - health care rationing, stemming from both managed care and Medicare/Medicaid.”

* Due to price controls and rationing decisions by bureaucrats, Canada’s Ministry of Health has contacted Norwood regarding reforms of the Patient’s Rights legislation. “The difference is they use government bureaucrats; we use corporate bureaucrats.”

* “If you were strictly private sector, your rates would reflect what you needed to run your practice, provide care, pay for your schooling and make a profit. I’m sure each o you would be happy to sell chemotherapy drugs at cost, or not at all, if you were taking in a reasonable charge for your direct services. But Medicare government bureaucrats have cut your treatment reimbursement to a level that you can’t stay in business. Your only option is to make your profit on the sale of chemotherapy drugs” - a practice the Medicare administration and Congress is now scrutinizing.

* One thing that will be required to restore the free market: “As much research as can possibly be provided for medical breakthroughs in prevention and treatment of disease, in cost-effective ways. Congress must be willing to fund it, if we are to avoid excessive pharmaceutical costs. that’s a helluva thing for a conservative dentist to say, but otherwise we’ll just guarantee ourselves thousand-dollar prescriptions forever, which working class people can’t afford. Since they won’t agree to die to save money, they’ll eventually demand socialized medicine to pay the cost. We simply have to do it to maintain a free market system.”

* Also, Medical Savings Accounts provide instantaneous reimbursement to practitioners for services, create the perfect wellness incentive - consumers keep the cash if they don’t use it as patients, and restore a market in health care: “...for the first time in decades, patients are going to be paying attention to your rates. Their health care expenses will once again be in their own hands. Charge a fair amount for your services...”

Source: “Remarks By the Honorable Charlie Norwood of Georgia,”
The Georgia Society of Clinical Oncology Annual Meeting, Swissotel,
Atlanta, Georgia; Saturday, October 20, 2001.

-Citizens’ Council on Health Care
-December 3, 2001


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ADULT STEM CELLS CURE SICKLE CELL PATIENT

Keone Penn is one happy boy. Adult stem cells have cured
him of sickle-cell disease and given him his life back.
His adult stem cells are from an umbilical cord, not the
controversial embryo. The cells rescued within 15 minutes
after the birth can be saved for the future, and injected
into the body to create “a blood factory, replacing
diseased blood with healthy blood,” according to CBS News.

Keone was diagnosed with sickle cell disease when he was
only 6 months old. At age 5, he had a stroke. The cells
which do not maintain the round formation of normal cells
caused him excruciating pain in his joints and lower back.
Even morphine was ineffective for the pain by the time he
turned 11 years old.

With an estimate of only five years to live, Keone’s
physician at the University of Pittsburgh took a chance.
Stem cells had never been used to treat sickle cell disease,
but stem cells unlike the risky bone marrow transplant
treatment, do not require an exact donor match. A similar
type was found at the New York Public Blood Bank which has
been collecting donations of umbilical cord blood since 1992.

In 1998, after his bad blood was destroyed with chemotherapy,
Keone received the stem cells. Within a few weeks there was a
big surprise. His blood type was changed from type O to type B.
He took on the blood type of the donor. After a year doctors
said the disease had disappeared. Doctors now consider him
cured.

The cost of saving cord blood at the Cord Blood Registry is
a $1,300 flat fee and a $95 annual payment. The American
Academy of Pediatrics says the peace of mind isn’t worth the
money for parents. On the other hand, public blood banks take
donations for free.

Source: Adult Stem Cells Completely Cure Sickle Cell Patient
Source: CBS News; November 28, 2001

-Citizens’ Council on Health Care
-December 3, 2001


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HHS: PRIVACY BREACHES NEED NOT BE DISCLOSED

If your private medical records have been put online or
disclosed without your consent, you need never be informed.

Linda Sanches, the chief enforcer of the medical privacy
rule from the Office of Human Rights of the Department of
Health and Human Services says that covered entities (hospitals,
doctors, health plans, data translation corporations, and
other health care facilities and professionals) are not
requiredto report privacy breaches to the patients whose
information was improperly released. Even the government
does not have to be informed.

”[I]nforming patients that their secrets have been released
”is not specifically required,” according to the Inside HIPAA
Compliance publication which questioned and interviewed Sanches.
When asked why, she was unsure, but said the Department may not
have asked for public comments, or leaving it out was “a
compromise.”

The only requirement for disclosure is if a patient exercises
their right to an accounting of disclosures which they can have
once a year. If they request it, the breach must be disclosed.
Complaints to the Civil Rights Office of the Department of
Health and Human Services must be sent by e-mail or in writing
within 180 days of the violation—but only after April 2003 when
the rule takes effect.

Source: “In Effect, ‘Don’t Tell, Don’t Tell’ You Can Keep
Patient Record Leaks Quiet,” Inside HIPAA Compliance, Vol. 1,
No. 2, November 2001, http://www.insidehipaa.com/current.issue.html#112001Sanches

-Citizens’ Council on Health Care
-December 3, 2001


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MEDICAL COLLEGES WANT MORE ACCESS TO DATA FOR RESEARCH

”The AAMC joined nearly 200 research universities,
medical schools, teaching and community hospitals,
medical specialty and scientific societies, and other
associations in a Nov. 20 letter to HHS Secretary Tommy
Thompson requesting that the department re-open rulemaking
for the “Standards for Privacy of Individually Identifiable
Health Information.”

Citing ‘the growing consensus within our community that the
rule must be amended to avoid the harm that will result when
covered entities and research companies in private industry
begin their implementation efforts,’ the letter states,
’[T]he rule’s restrictions on the use and disclosure of
protected health information for research purposes, and limits
on the retention of research data, will seriously impair our
ability to conduct clinical trials, clinico-pathological studies
of the natural history and therapeutic responsiveness of disease, epidemiologic and health outcome studies, and genetic research.’”

Source: Taken directly from “AAMC Calls on HHS To Reopen
Privacy Rule’s Research Provisions,” AAMC WASHINGTON HEADLINES
Legislative and Regulatory News, Association of American Medical
Colleges, November 30, 2001
http://www.aamc.org/advocacy/washhigh/01nov30/start.htm


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BIRTH DATA OF CALIFORNIANS SOLD & POSTED ONLINE

The public portion of California’s birth certificate has been
placed online by Rootsweb.com. The service was sold the data
held by the State Department of Health. More than 24 million
Californians are affected. Rootsweb is a geneology Web site.

Data includes place of and mother’s maiden name, which could
be used to gain access to bank records and other sensitive
materials. Some state senators and privacy experts are
concerned that access to the data could lead to identity
theft and proliferation of false passports and identification
cards. Although anyone can get the data from the State, putting
it online makes the process easy from anywhere in the world.

Under current law, California sells birth and death records.
The data from 1909 to 1995 sells for about $900. Only two
people have bought the data in the last year. Texas is the
only other state to provide data to Rootsweb.com.

Source: “State sells birth data to Web site, raising ID theft
fears,” DION NISSENBAUM, Mercury News Sacramento Bureau, 11/29/01.
http://www.siliconvalley.com/docs/news/svfront/037140.htm

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CCHC COMMENTARY: During the 2001 session of the Minnesota
legislator, the MN Department of Health attempted unsuccessfully
to give researchers full access to the NON-public portion of
the birth certificate. The Department now gives researchers
access for Department research initiatives, but the data is
not available for non-Department projects. Data on the non-public
portion includes behavior of mothers, type of birth complications,
use of procedures, type of delivery, birth defects, and other
medical information.

-Citizens’ Council on Health Care
-December 3, 2001


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COSTS TO DEVELOP NEW DRUGS SOAR

It is two-and-a-half times more expensive to research a new
medication now than it was in 1987, even adjusting for inflation.
That is the conclusion reached by researchers at the Tufts
University Center for the Study of Drug Development.

o On average, it now takes $802 million, including the cost
of capital, to come up with a new pharmaceutical product.

o While total research costs increased 7.4 percent annually
in the 1990s, clinical costs—the component of research
associated with testing drugs on humans—rose 12 percent
annually.

o Due to demands by managed-care buyers that drug companies
prove the value of their drugs in larger and longer
trials, the number of patients in a new drug trial has
increased from about 1,300 in the early 1980s to more than
4,000 for a typical new medicine today.

o The study found that the average development time for new
medicines is 12 years.

In the 1990s, drug firms spent an average of $121 million out-of-
pocket in research prior to clinical trials—but that figure
rises to $336 million when the costs of capital are included.
The clinical testing stage consumes $282 million—or $466
million when capital costs are factored in. The capital costs
are determined by figuring how much would be returned by
investing the money at 11 percent over time.

Drug company executives point out that patent-protection laws --
which have come under attack by some critics—are vital to
encouraging and protecting such huge investments.

Source: Gardiner Harris, “Cost of Developing Drugs Found to
Rise,” Wall Street Journal, December 3, 2001.

For text (WSJ subscribers)
http://interactive.wsj.com/archive/SB1007336440403996240.htm

For study info
http://www.tufts.edu/med/csdd/Nov30CostStudyPressRelease.html

Source: Taken Directly from Daily Policy Digest, National
Center for Policy Analysis, 12/3/01, http://www.ncpa.org


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COST OF OVER-RIDING PATENT DRUG PROPERTY RIGHTS (CIPRO)

In the wake of the anthrax scare, U.S. politicians pounced on the
patent property rights of the German pharmaceutical firm Bayer,
maker of the antibiotic Cipro.

Ironically, Cipro’s most important use is not to treat so-called
”inhalation anthrax,” for which there are alternatives
(doxycycline is one), but to treat bacterial infections resistant
to older antibiotics.

Thus, widespread prophylactic use of Cipro could lead to new
strains of antibiotic resistant organisms—so many more people
could die from panicky overuse than from anthrax.

Maybe politicians and media elites don’t think their lives are
worth $50 -- the cost of treatment with Cipro—which U.S. Senate
Democrats denounced as too high.

o The nondiscounted retail cost of Cipro in the U.S. is
about $5 a pill—and doctors recommend taking two pills
for five days, followed by other antibiotics.

o The federal government had already obtained millions of
doses of Cipro at a discounted price of $1.77 per pill for
the National Pharmaceutical Stockpile.

o By comparison, the government controlled price in Canada
is approximately U.S. $1.30 per pill, while the United
Kingdom’s National Health Service charges about $2 per
pill.

o But shortly after U.S. Health Secretary Tommy Thompson
testified (October 23) that he might invoke a U.S. law
allowing him to abridge Bayer’s patent, the company
offered one hundred million pills at a price of $0.95 per
pill, with an option to supply two hundred million more at
$0.85-$0.75 per pill.

Thus the U.S. got a 50 percent discount on a drug that took many
years and hundreds of millions of dollars to develop.

Another consequence is that developing countries, which the World
Trade Organization is attempting to have honor intellectual property
rights, can point to Cipro as a precedent and another instance of
Western hypocrisy.

Source: John E. Calfee, “Bioterrorism and Pharmaceuticals: The
Influence of Secretary Thompson’s Cipro Negotiations,” Draft,
November 1, 2001, American Enterprise Institute; Thomas Sowell,
”Drugs and Politics,” November 23, 2001, Townhall.com.

For AEI text http://www.aei.org/ps/pscalf011101.htm

For Sowell text
http://www.townhall.com/columnists/thomassowell/ts20011123.shtml

Source: Taken Directly from Daily Policy Digest, National
Center for Policy Analysis, 11/30/01, http://www.ncpa.org


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DEFINED BENEFIT RETIREMENT PLANS DISTORT STOCK PRICES

Defined benefit pension plans helped cause the stock market
bubble of recent years, a new study suggests. And they may be
depressing corporate profits and thus stock values now.

As the stock market rose, it inflated the value of traditional
defined benefit pension plans, which hold a company’s stock to
pay set monthly retirement benefits.

Corporations withdrew the plans’ excess assets—which are
treated as additional profits—and the improved bottom line
raised their stock values even higher.

But when stock prices decline, corporations have to make
additional deposits of stock to their defined benefit plans --
which in effect lowers profits and reduces stock values.

o According to Bear, Stearns, IBM took $1.24 billion out of
its pension fund last year alone, accounting for 11
percent of the firm’s operating income.

o DuPont took out $469 million, 10 percent of its operating
income.

o According to the Federal Reserve, there have been
substantial net withdrawals from defined benefit plans
every year since 1995 -- $36 billion out last year alone.

o By contrast, workers and employers added $55 billion to
defined contribution (DC) retirement plans, such as 401(k)s
(see figure). http://www.ncpa.org/edo/bb/2001/images/bb112601.gif

Fortunately, a majority of workers are now covered by DC plans.

o According to the Department of Labor, the number of
workers covered primarily by a DC plan doubled between
1986 and 1996, from 12.7 million to 24.2 million.

o Over the same period, the number covered primarily by a
defined benefit plan fell from 28.5 million to 23.3
million.

With defined contribution plans, workers gain when stock prices
rise and investors of all kinds benefit because workers saving
for retirement don’t take their profits prematurely, and don’t
distort corporate profits. The continuing shift from defined
benefit plans to defined contribution plans therefore benefits
everyone.

Source: Bruce Bartlett, senior fellow, National Center for Policy
Analysis, November 26, 2001.

For text http://www.ncpa.org/edo/bb/2001/bb112601.html

Source: Taken Directly from Daily Policy Digest, National
Center for Policy Analysis, 11/26/01, http://www.ncpa.org

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NOTE: These news items have been taken directly
from email received by CCHC or from Internet
newspaper publications. Titles in ALL CAPS are
CCHC creations except for those heading articles
from the National Center for Policy Analysis,
the Health Law Pulse, PrivacySecurityNetwork,
and LIST.HEALTHPLAN. Credit to the sending
organization or news service is listed at the
end of each article.
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