Posted on the Wall Street Journal Health Blog, Thursday, May 3, 2007
May 3, 2007, 2:37 pm
In his first major public speech on health policy, Pfizer CEO Jeff Kindler yesterday laid out some ideas on how to pay for health-care in America while preserving the nation’s economic competitiveness.
Early on in a luncheon talk before the Economic Club of Washington D.C., Kindler (pictured, left) tried to disarm critics of drug and biotech companies. “Our industry needs to acknowledge some big mistakes,” he said, according to text of the speech provided to the Health Blog by Pfizer. “We need to move from an industry that has sometimes seemed at war with its environment and with some of its customers–including the governments who often pay the bills–to an industry that anticipates, understands and responds to all of our customers.” These errors, Kindler said, included early resistance to funding FDA via user fees, opposition to making affordable AIDS drugs available in Africa and sales and marketing practices that “still bother some of our customers.”
On the health-policy front, he said the country needs to invest in prevention and wellness. This well-worn advice could lead to an epidemic of eye-rolling, he acknowledged, but he framed the American problem like this: “Is the competitive disadvantage that we pay so much for healthcare, or that we need so much more in the first place?” Obesity and gun fatalities were two examples he cited of America’s avoidable, self-inflicted ills. Kindler also said the fact that 46 million Americans have no health insurance is “a scandal,” and called for a core health-care benefit available to everyone.
I believe Pfizer is on the right tract, on Health care. If we do not soon have some sort of national health care. It well maybe the down fall of our way of life in this country.
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Universal healthcare is certainly very desirable, as is making lifesaving drugs availably cheaply to impoverished countries. But I don’t see Mr. Kindler addressing two major and interrelated criticisms about the drug industry, (a) charging about twice as much for drugs in the US as they do in European or other first world countries, and (b) opposing direct price negotiations as a customer by the government for drugs that it pays for.
In both cases the pharma industry stymies reforms through its lobbying clout, influence won through campaign contributions and misinformation spread through think tanks and pundits funded by it.The understated reference to sales and marketing is interesting. To the argument that high US prices are crucial to more innovation, it is worthwhile noting that drug companies on average spend over 30% of their revenues on marketing, as against 13% on R&D.If only Americans paid the same prices for drugs as other first world countries they’d be saving $100 billion a year.
Published in WSJ Online, Wedneday, May 2, 2007:
Heart-Attack Death Rates Drop As Treatment Options Improve
Associated Press May 1, 2007 4:00 p.m.
CHICAGO -- In just six years, death rates and heart failure in hospitalized heart attack patients have fallen sharply, most likely because of better treatment, the largest international study of its kind suggests.
The promising trend parallels the growing use of cholesterol-lowering drugs, powerful blood thinners, and angioplasty, the procedure that opens clogged arteries, the researchers said.
"These results are really dramatic, because, in fact, they're the first time anybody has demonstrated a reduction in the development of new heart failure," said lead author Keith Fox, a cardiology professor at the University of Edinburgh.
The six-year study involved nearly 45,000 patients in 14 countries who had major heart attacks or dangerous partial artery blockages. The percentage of patients who died in the hospital or who developed heart failure was nearly cut in half from 1999 to 2005.
And the heart-attack patients treated most recently were far less likely to have another attack within six months of being hospitalized when compared to the patients treated six years earlier -- a sign that the more aggressive efforts of doctors in the last few years are working.
There have been other signs that better treatment of heart patients has been saving lives, but not on a scale as large as this international study, the researchers said. "It's much more dramatic than we expected, in the course of six years," Dr. Fox said.
The new study follows landmark research results in March that showed angioplasty is being overused on people who have chest pain but are not in immediate danger of a heart attack. But this popular procedure, which typically uses stents to keep an unclogged vessel open, is still a powerful tool for saving those who are having a heart attack or are at high risk of one.
Patients for the study enrolled between July 1999 through December 2005 and were followed for up to six months after hospitalization. Besides the U.S., they were in hospitals in Argentina, Australia, Austria, Belgium, Brazil, Canada, France, Germany, Italy, New Zealand, Poland, Spain and the United Kingdom.
The research showed that in 2005, 4.6% of the heart attack patients died in the hospital, compared with 8.4% in 1999. Heart failure developed in 11% of heart attack patients in 2005, versus nearly 20% in 1999. And just 2% had subsequent heart attacks in 2005, compared to 4.8% previously. Improved outcomes also were found in those with partial blockages, which include less-severe heart attacks.
The researchers said these marked improvements are probably a "direct consequence" of new practices that followed updated guidelines from key organizations of heart doctors in the U.S. and Europe.
The study "is the first report of what's actually going on in the real world," said Joel Gore, a co-author and cardiologist at the University of Massachusetts Medical Center.
Recommendations in those guidelines include quick use of aspirin or more potent blood thinners; beta blockers to reduce the damaged heart's oxygen needs, statins to lower cholesterol; ACE inhibitors to relax blood vessels; and angioplasty to open blocked vessels soon after hospital arrival.
Use of each of these treatments climbed during the study and in some cases more than doubled. For example, 85% of heart patients studied got cholesterol drugs in 2005 versus just 37% in 1999; 78% got potent blood thinners including Bristol-Myers Squibb Co. and Sanofi-Aventis's Plavix versus 30% in 1999; and 53% had quick angioplasty, compared to just 16% six years earlier.
The study appears in Wednesday's Journal of the American Medical Association. It was funded by a grant from Sanofi, which makes several other heart drugs as well as ACE inhibitors. Dr. Fox and several other authors reported getting fees and grants from Sanofi and other drug makers.
Steven Nissen, former president of the American College of Cardiology and a Cleveland Clinic heart specialist, said the study doesn't prove the recommended treatments were saving lives but he suspects that is the case. "I really am encouraged that those things that appear in our guidelines are being used by physicians around the world," Dr. Nissen said.
American Heart Association spokesman Sidney Smith said the results are "exactly what we would hope would happen from the major efforts in this area over the past decade.
"The tragedy is that too many patients delay before coming to the hospital," Dr. Smith said.
U.S. Senate to Consider Measure For New FDA Drug-Safety System
By JENNIFER CORBETT DOORENApril 30, 2007 2:33 p.m.
The U.S. Senate is scheduled to start debating a bill Monday that would require the Food and Drug Administration to establish a safety system to monitor new drugs for at least three years after they have been approved.
Such provisions aimed at boosting drug safety are part of a broader bill of Sens. Edward Kennedy (D., Mass.) and Michael Enzi (R., Wyo.) that would renew a law allowing the FDA to collect fees from pharmaceutical and medical-device companies to help fund the agency.
A Senate panel approved the bill earlier this month on a 15-5 vote with Republicans split on the bill. While staff for Messrs. Kennedy and Enzi are trying to limit the number of amendments that might come up, as of late Friday no deal had been reached. An Enzi spokesman said there were several amendments on the Republican side that could be offered. Most Senate staffers involved in the legislation expect the bill to be on Senate floor all week.
A federal law that authorizes the FDA to charge industry user fees expires Sept. 30, the end of the 2007 fiscal year. The Kennedy-Enzi bill, known as the FDA Revitalization Act, would renew the law through 2012. User fees fund part of the FDA's annual budget. The fees are collected, for example, when companies file applications to the agency seeking approval of new products.
The fact that the user-fee law expires this year makes it almost certain that Congress will include tougher drug-safety provisions as part of a final bill renewing the fees. Many of the drug-safety provisions were introduced as separate pieces of legislation amid congressional criticism about whether the FDA should have done more and sooner to warn consumers about the risks of the painkiller Vioxx. Merck & Co. pulled Vioxx off the market in 2004 after the drug was tied to an increased risk of heart attacks and strokes.
Any FDA bill that passes the Senate must eventually be reconciled with a yet-to-be introduced bill in the House that would renew user-fee laws.
The FDA Revitalization Act also renews another law that gives drug companies incentives to conduct research on drugs for children. The bulk of drugs on the U.S. market were developed for adult consumption.
The main drug-safety component in the Kennedy-Enzi bill is a risk-management program involving formal surveillance of medicines for three years after they are approved.
It would require the FDA to review the safety profile of all new chemical entities or new types of drugs at 18 months and then three years after they are approved. Under the program, the FDA would have access to public and private databases that track, among other things, reports of side-effects in patients. Other drugs, such as those currently on the market but subsequently approved to treat another illness, would be also reviewed for three years once they are approved for alternative use.
During Senate panel debate on the bill earlier this month, Sen. Judd Gregg (R., N.H.) said he wasn't opposed to setting up a surveillance system but said he didn't think all new drugs needed to first go into a formal risk-mitigation system.
Since 1992, the FDA has raised some funding by charging fees to both medical-device and drug companies. The rest of its budget is funded through money appropriated by Congress.
The FDA has proposed collecting $393 million from pharmaceutical companies next year, but the Kennedy-Enzi bill would increase that amount by $50 million. The bill would also authorize the FDA to collect about $287 million in fees from medical-device firms over the next five years.
It also authorizes more money and gives the FDA more power to review television advertisements for drugs before they are aired. Many companies already voluntarily allow the agency to preview commercials before they are aired.
Critics of the provisions, like Sen. Pat Roberts (R., Kansas), have said the advertising provisions could allow the FDA to block companies from advertising their drugs, in violation of the Constitution's free-speech clause.
During panel debate on the measure, Sen. Hillary Rodham Clinton (D., N.Y.) agreed then to hold off on trying to add a bill that would establish a pathway for the FDA to approve generic copies of expensive biotech drugs made from proteins. However, she said she wanted the issue addressed before the broader FDA bill went to the floor. Mrs. Clinton's office didn't return a call seeking comment on whether the lawmaker would attempt to add generic legislation this week. Messrs. Kennedy and Enzi have each said they would prefer to move the biotech generic legislation as a separate bill later this year.
The Kennedy-Enzi bill also mandates companies to register clinical studies of drugs in a public database as well as make all the results available.
Published in The Wall Street Journal, Saturday, April 28, 2007, page A3:
Health Insurers Settle Dispute On Pay With 900,000 Doctors
By VANESSA FUHRMANSApril 28, 2007; Page A3
Nearly two dozen Blue Cross and Blue Shield plans across the country settled a longstanding class-action suit with roughly 900,000 physicians who claimed the health insurers unfairly cut reimbursements to them.
The agreement, which both sides valued at more than $128 million, is still subject to the approval of Judge Federico Moreno of U.S. District Court in Miami, where it was presented Friday. It follows settlements in recent years of a separate but similar lawsuit against big for-profit insurers such as Aetna Inc., Cigna Corp. and WellPoint Inc.
Both legal battles revolve around health insurers' systems for processing reimbursement claims from the doctors. These systems parse doctors' claims and often reduce them by combining or rejecting certain charges. Insurers contend that such systems check for redundant or excessive billing to keep a lid on medical costs. The physicians and their medical societies contended that the insurers conspired to systematically cheat them out of full payment.
The terms of Friday's settlement are similar to the others. But with 23 Blue Cross and Blue Shield companies on board, it covers the health plans of some 50 million members, making it the biggest so far.
As part of the agreement, the insurers will contribute about $128 million to a fund to which doctors can submit previously disputed claims. The insurers will also pay as much as $49 million in legal fees, the full amount to be determined by Judge Moreno.
That doesn't do much for doctors financially. The bigger value, attorneys say, will come from the insurers' other commitments. They include establishing an external review board to hear physicians' billing disputes, more transparent fee schedules and payment explanations, and standardized definitions and review procedures for determining what makes a service or procedure medically necessary.
Published in WSJ, Friday, April 27, 2007
FDA Rejects Merck's Request To Market Arcoxia in U.S.
By JENNIFER CORBETT DOOREN April 27, 2007 12:02 p.m.
WASHINGTON -- The Food and Drug Administration rejected Arcoxia, a Vioxx-like drug by Merck & Co., the company said Friday.
Merck was seeking FDA approval of Arcoxia, a drug that falls into the same class as Vioxx, to treat osteoarthritis. Vioxx was pulled off the market in September 2004 after it was linked to an increased risk of heart attacks and strokes.
Merck said the FDA issued Arcoxia a "non-approvable" letter stating the company would need to provide additional data in support of the benefit-to-risk profile for the proposed doses of Arcoxia in order to gain approval.
The FDA's decision was expected. Earlier this month an outside panel of medical experts voted 20 to 1 against approval of the drug amid concerns it raises the risks of heart attacks and strokes.
"We are disappointed with today's decision," said Peter S. Kim, president, Merck Research Laboratories. "We pursued FDA approval of Arcoxia because we believe strongly that new medicines are needed for patients whose osteoarthritis pain is inadequately managed with currently available therapies."
Arcoxia, considered a Cox-2 drug, is on the market in 63 other countries and Merck said it would continue marketing the drug outside the U.S.
Pfizer Inc.'s Celebrex is the only Cox-2 on the U.S. market. In 2005, the FDA asked Pfizer to pull its other Cox-2 drug, Bextra, off the market as well as strengthen warnings on Celebrex. Cox-2s were designed to be easier on the stomach than older anti-inflammatory drugs, or NSAIDs, which include ibuprofen and naproxen. NSAIDs inhibit the both Cox-2 and Cox-1 enzymes in order to cut pain, however Cox-1 is also related to stomach functioning.
The FDA has said it assumes all prescription non-steroidal anti-inflammatory drugs, or NSAIDs, which include ibuprofen and naproxen, carry an increased risk of cardiovascular problems. Drugs such as Celebrex and Arcoxia, also fall into the broader NSAID class. The agency said proposed prescription painkillers should fill an unmet medical need for patients who have no other "relatively safer" alternatives.
Merck shares fell 43 cents to $52 on volume of 1.6 million.
Published in: WSJ Online, Wednesday, April 25, 2007
Poll Shows Support for Measures On Employer Health-Insurance
THE WALL STREET JOURNAL ONLINE April 25, 2007
More than three-quarters of Americans support a variety of initiatives to expand health-insurance coverage, including government subsidized insurance plans for individuals who don't have access to employer-paid insurance and tax credits to help individuals purchase health insurance, a new poll shows.
The poll, conducted April 13 to 17, shows half of U.S. adults with health insurance coverage worry that their expenses will be so high that they won't be able to pay them. And just as many worry that their coverage will be drastically reduced or eliminated because of costs, according to the Wall Street Journal Online/Harris Interactive health-care poll.
With affordability and security of benefits a concern, support for the programs to expand coverage is equally strong among the insured as well the uninsured, according to the poll. By contrast, only 26% of those polled said they are willing to pay more in taxes to cover more people under Medicare or Medicaid.
States are also looking at new means of addressing the problem, as the number of uninsured in America has climbed to an estimated 45 million, according to U.S. Census Bureau estimates for 2005. Seventy-four percent of U.S. adults polled said they would support a measure requiring employers to provide insurance for all of their employees, a proposal similar to those being floated by lawmakers in California, Illinois and other states.
The question of employer mandates has raised concerns about the impact this might have on smaller employers. Two-thirds of those polled believe requiring smaller employers to provide health insurance might force some employers out of business. But, when asked if the benefits of such mandates would outweigh these risks, 47% said they would and 53% said they would not.
Published in WSJ, Wednesday, April 25, 2007
WellPoint Posts 7% Rise in Net, Raises Outlook for 2007
By JOSEE ROSEApril 25, 2007 6:56 a.m.
WellPoint Inc. reported a 7% increase in first-quarter net income and raised its 2007 outlook, but again reported a higher benefit-expense ratio.
WellPoint, one of the nation's largest health insurers, said its benefit-expense ratio, a measure of medical costs as a percentage of premium revenue, was 83.1%, up from 81.3% in the year-earlier period, due to the medical business of the specialty, senior and state-sponsored business segment. WellPoint said the benefit-expense ratio in its senior business increased mostly due to Medicare part D, as expected.
The Indianapolis company's net profit increased to $783.1 million, or $1.26 a share, from $731.8 million, or $1.09 a share, a year earlier. Previously, the company projected first-quarter earnings of $1.25 a share.
Revenue grew 9% to $15.08 billion from $13.84 billion in the year-earlier period. Both earnings-per-share and revenue numbers matched the average estimate of analysts, according to Thomson Financial.
During the quarter, medical enrollment grew by 774,000 members, led by national accounts. As of March 31, WellPoint had 34.9 million members, an increase of 717,000 members from a year earlier. WellPoint said the increase was due to national accounts and state-sponsored business. Growth from the prior year excludes the impact in the change in the company's 50% Puerto Rico joint venture.
For the second quarter, the company continues to expect net income of $1.35 a share, and for 2007, WellPoint raised its earnings guidance to $5.54 a share from $5.53 a share. On average, analysts polled by Thomson Financial expect second-quarter earnings of $1.36 a share and full-year earnings of $5.55 a share.
WellPoint expects year-end medical enrollment of 35.5 million members, representing growth of 1.4 million members, or 4%. The company expects its benefit expense ratio to be about 81.9%.
Last week, rival UnitedHealth Group Inc. reported a 4% rise in first-quarter net profit and an 8.3% rise in revenue. Industrywide, investors expected solid earnings growth and assurance that medical costs aren't taking too big a bite out of revenue from premiums.
Published in WSJ Online, Sunday, April 22, 2007:
Advantage Plans' Risk
By JANE ZHANGApril 22, 2007
Millions of seniors have flocked to private Medicare plans, often with low or even zero premiums. But for some, the new choices may also come with risks.
When people enroll in these Medicare Advantage plans, they opt out of traditional Medicare, in which the government pays medical providers directly. Instead, the U.S. pays the insurers that offer the private plans; some plans offer extras such as vision care in addition to covering physician and hospital services.
One problem: When Medicare beneficiaries sign up for these plans, they don't always understand the details, such as how much they will pay for physician visits outside their plan's network or for hospital stays or treatments such as chemotherapy.
Some beneficiaries have trouble finding providers willing to accept their plans. And they can get tripped up as doctors transfer in and out of networks, says Deane Beebe, spokeswoman for the Medicare Rights Center, a New York-based advocacy group.
Good for the Healthy?
"Many of these for-profit plans work well when you are healthy," Ms. Beebe says. "Once people get sick, that's when they find out the limitations of the plan."
Mohit Ghose, a spokesman for America's Health Insurance Plans, an industry trade group, says Advantage plans can be "extremely helpful" to seniors if they choose ones that fit their needs. For instance, some plans provide disease-management services and cap enrollees' out-of-pocket spending.
"To say that only healthy people should be in Medicare Advantage is highly misleading," Mr. Ghose says.
In the past few years, Advantage plans have become more popular. In an effort to expand private plans, Congress in 2003 raised payment rates to managed-care companies. Insurers improved their offerings and pitched them to seniors alongside the insurers' Medicare prescription-drug plans. (Recently, there's been some talk in Congress of cutting payments to the Advantage insurers.)
Today, one in five Medicare beneficiaries, or 8.3 million, has enrolled in a private plan, according to the federal Centers for Medicare and Medicaid Services. Among the biggest providers: Humana and UnitedHealth Group.
One-Stop Shopping
With all-in-one Advantage plans, seniors can avoid the hassle of enrolling separately in Medicare, supplemental private insurance and prescription-drug coverage. Some plans offer nurses' hotlines and other services to help seniors understand and choose care.
But for some seniors, Advantage plans can prove to be more costly. Low-income beneficiaries who need frequent care, for example, are also covered by the federal/state Medicaid program. Some of those beneficiaries, after switching to Advantage plans, have found out that they have to pay more out of pocket for care.
Another danger: Seniors can inadvertently lose corporate retiree coverage when they sign up for an Advantage plan.
In evaluating a plan's benefits and restrictions, Bonnie Burns of California Health Advocates, a nonprofit Medicare education group, suggests getting free help from state health-insurance counselors. Find them by calling 1-800-MEDICARE or online at medicare.gov/contacts/static/allStateContacts.asp.
The expanded oversight will be "good for beneficiaries and the plans," says Abby Block, director of Medicare's Center for Beneficiary Choices.
Published in WSJ on Saturday, April 21, 2007, page A7.
"We Need Complete Health-Care Competition".
Your "Capital" column on the evolution of thinking in health care ("What's Changed in the Protracted Health-Care Debate," Politics & Economics, April 12) quotes Ronald Williams, chief executive of Aetna Inc., as saying that "every consumer insists on the right to choose a poor-quality physician." Now, aside from this being the sort of arrogant comment we've come to expect from insurance-company executives, Mr. Williams shows a profound lack of understanding of what elements drive choices in physicians.
Aetna and other health-plan marketers attempt to measure quality by examining how closely physicians adhere to certain benchmarks, some of which border on the ridiculous, such as asking five-year-olds at every pediatrics visit whether or not they smoke. Consumers measure quality by talking to family members, friends and referring physicians about their experiences with a prospective treating physician.
Mr. Williams's condescension reveals how he truly regards the simpletons to whom he's trying to sell health insurance. I'm sure his customers see in Mr. Williams a person whose 2006 compensation of $22 million could purchase basic health care for 4,400 families for an entire year. It's worth remembering that Aetna was the company that systematically underpaid health-care claims for years before a lawsuit brought the practice to a halt with Aetna paying a huge monetary settlement.
Consumers have had it with companies such as Aetna and executives such as Mr. Williams interfering with their health-care choices and decisions. Throw it wide open and let doctors and hospitals compete on quality and price without the Aetnas taking their slice off the top.
Benjamin W. BegleyOshkosh, Wis.
Published in WSJ, Friday, April 20, 2007.
UnitedHealth's Net Climbs 4%;Analysts View Results as Mixed
By JOSEE ROSEApril 19, 2007 10:11 a.m.
UnitedHealth Group Inc. ushered in the managed-care earnings season, reporting a 4% rise in first-quarter profit Thursday.
The Minnetonka, Minn., company, one of the nation's largest managed-care providers and considered a bellwether for the industry, said net income rose to $927 million, or 66 cents a share, from $891 million, or 63 cents a share, a year earlier. In January, the company projected first-quarter net income of $980 million to $1 billion. Excluding charges related to stock-option matters, earnings were 74 cents a share.
Revenue at UnitedHealth increased 8.3% to $19.05 billion from $17.58 billion.
UnitedHealth's medical-care ratio, a measure of medical costs as a percentage of premium revenue was 82.7%, up 0.6 percentage points from a year earlier and 2.7 percentage points from the previous quarter, due to substantial growth in the Part D prescription-drug plan and an increase in the risk-based employer-sponsored benefit plan medical-care ratio.
Revenue at the health-care services unit rose to $17.09 billion from $15.8 billion. This includes an 8% increase in health-services revenue and a 16% increase in Ovations revenue. Ovations serves seniors and encompasses Medicare products, including the Part-D prescription-drug benefit program.
Revenue for UnitedHealthcare, the company's biggest health-insurance unit, increased 2%.
J.P. Morgan analyst William Georges said the company's medical-loss ratio of 81.2% in the commercial business was higher than his estimate. On the other hand, he said, the company's consolidated medical-loss ratio was lower than he had expected, as was its administrative-expense ratio.
Membership in the company's AmeriChoice plan rose by 20,000 people in the first quarter and expanded by 100,000 members from a year earlier.
Membership in Medicare Advantage plans fell 100,000, but the company expects improved growth results from this line. On a year-to-year basis, plans increased by 15,000. Ovations Medicare Advantage programs are full-service health plans provided by companies under Medicare, the federal health insurance program for older Americans.
In the beginning of February, UnitedHealth warned of lower-than-expected enrollment in Medicare Advantage plan.
For the second quarter, UnitedHealth expects earnings of 80 cents to 82 cents a share. On average, analysts polled by Thomson Financial expect earnings of 81 cents a share.
For 2007, the company expects earnings of $3.34 to $3.38 a share, including stock-option charges of eight cents a share. Excluding these charges, the company increased its outlook to $3.42 to $3.46 a share, on revenue of about $77 billion. Wall Street projects earnings of $3.42 a share. In February, the company lowered its 2007 revenue forecast to about $78 billion from a previous outlook of about $79 billion.
UnitedHealth spent the last year trying to recover from a stock-options backdating scandal, which resulted in the resignation of Chairman and Chief Executive William McGuire and a restatement of prior profits that cut earnings by a combined $1.55 billion. UnitedHealth is one of the biggest firms caught up in the scandal; more than 200 companies are under investigation for putting erroneous dates on stock options to maximize potential profits.
Published in WSJ, Tuesday, April 17, 2007
AARP to Offer Health Coverage To Wider Group
By VANESSA FUHRMANSApril 17, 2007; Page D2
The powerful senior lobby AARP announced an ambitious expansion in the health-care products it markets to older Americans, targeting in particular the roughly 7 million who are still under the age of 65 and have no coverage.
As part of the expansion, the 38 million-member organization renewed and expanded a longstanding contract with UnitedHealth Group Inc. to continue to sell AARP-branded indemnity health plans, Medicare supplement policies and drug benefit plans. It will also market private, comprehensive Medicare plans, known as Medicare Advantage, under the AARP name. The group also struck a new partnership with Aetna Inc. to design, underwrite and administer a range of health plans for the under-65 set.
AARP says its move is an effort to improve the health and to bring more affordable and stable health care coverage to a population that increasingly finds it out of reach. Unless they're covered by an employer, many Americans between the ages of 50 and 64 find individual insurance either too expensive or simply unavailable from health insurers eager to avoid customers in declining health.
The deals also illustrate how providing health care for older Americans has become a big business, even as AARP tries to remain a consumer health advocate for its members.
The deals are a coup for both insurers, though Medicare still represents the much larger share of the business. UnitedHealth's existing partnership with AARP has already helped make it the largest seller of Medicare products, and generates roughly $5 billion in annual revenue just from selling Medicare supplement plans. For the first time, though, the insurers' income will also be tied to whether they improve the health care of plan members, provide easy-to-read policy materials and reach certain benchmarks in corporate governance, responsibility and diversity, AARP said.
AARP executives say the deals will help them reach their target of providing health insurance products to roughly 14 million people by 2014, up from 7 million today. Through its new and expanded partnerships with Aetna and UnitedHealth, AARP expects to generate some $4.4 billion in health care-related royalties over the next seven years, $1.5 billion more than its previous projections. AARP's CEO, Bill Novelli, said much of the money would be ploughed back into other health care access and affordability initiatives.
AARP's scale would help keep a lid on the new plans' costs, executives said.
Although Aetna would still underwrite, or price premiums individually based on a customer's health and demographics, it would be required to take a more flexible approach than many commercial insurers currently do. Members who bought the plans also would have access to disease management programs and other tools designed to monitor and improve chronic conditions such as diabetes—and which are typically only available through an employer group plan.
Likewise in the Medicare realm, UnitedHealth will be required to commit to providing AARP-branded Medicare Advantage plans in a given market for at least two years. Federal law requires insurers to stick to providing the plans a minimum one year.
AARP said the plans would become available at the beginning of 2008.
Published in WSJ Online, Thursday, April 12, 2007
Link Appoints Jeb Bush to BoardAssociated PressApril 12, 2007 1:28 p.m.
DALLAS -- Tenet Healthcare Corp. said Thursday that former Florida Gov. Jeb Bush has been appointed a director by the hospital operator's board.
Mr. Bush, 54 years old and younger brother of President Bush, left office in January after two terms.
In a statement issued by Tenet, Mr. Bush said he was impressed by the Dallas-based company's commitment to improving patient care.
Board member Bob Kerrey, a former U.S. senator from Nebraska, said the Bush appointment "reflects the real strides the company has made in recent years to build a solid foundation for future growth based on integrity and quality."
Tenet is among the largest hospital operators in the country, and Florida is its second-largest market.
The company was the subject of several investigations into Medicare overbilling. For many years, a high percentage of its revenue came from exploiting a loophole in Medicare regulations covering high-cost patients. The company reached a $900 million settlement with the government last year on those charges.
Mr. Bush was elected governor of Florida in 1998 and re-elected four years later.
Mr. Bush will stand for election for a one-year term at Tenet's annual shareholder meeting May 10 in Dallas. The company said it would amend its recently filed proxy statement to add his name to the list of board nominees.
Link Posted: Wall Street Journal: Thu Apr 12, 2007 7:39 am
Post subject: Re: The Changing Face of the U.S. Health-Care Debate
Warren Ross MD writes: I read your article in todays journal. I think your points are accurate. It amazes me that we can not move forward in this debate. I am a 60 year old primary care physician with 36 years of practice since graduation from medical school. My practice is highly succesful. I still enjoy going to work each day. These are my credentials.
Here is my idea about how to move forward; We need to have a single party payor for catastrophic health problems. Catastrophic health problems should be defined by expert panels that consist of people who actually practice medicine in their respective fields, (not just talk or write about it), lay people, ethicists, health economist and academics. Notice, I did not include insurance company representatives. The single party would be the federal government, (it is aready paying for such care indirectly). We need to then have medical savings accounts with means testing for "non catastrophic health care". Individuals and families who test will have a government subsidy (part federal, part state) that will allow them to purchase a plain vanilla plan. Such a plan will insure access to a primary care provider, (industrialized countries with a high percentage of health providers who are primary care have higher health standard measurements).
The insurance companies can then provide plans that will address non catastrophic health care. The cost of such insurance should be a small percentage of current premiums and thus more affordable. They will not be allowed to participate if they attempt to exclude people on the basis of prior illness, age, sex or any other reason they dream up. We will not make progress as long as our health care future is influenced by large publicly traded companies who preach an interest in health. The truth is, Americans are not healthier as a result of the involvement of the Aetna's and United Health Cares of the world.
Personal Letter, April 4, 2007
Dear John,
Ten weeks ago, on an icy day in Springfield, we launched an audacious campaign to change our politics and lift our country.
Today, I have some exciting news to share about the phenomenal progress we've made. And I wanted you to hear it first.
I'm proud to tell you that, after the first quarter of the campaign, we've exceeded all of our hopes and expectations.
In less than three months, a staggering 100,000 Americans have contributed to our cause -- tens of thousands more than the number reported by any other campaign. That's on top of the hundreds of thousands who have attended rallies, started groups and shared their ideas and energy.
It's been a truly historic response -- a measure of just how hungry people are to turn the page on this era of small and destructive politics and repair our American community.
And because of that extraordinary base of support, we were able to raise an astonishing $25 million -- $23.5 million of which can be used to help us in the upcoming primary contests.
What makes this achievement even more noteworthy is that we did it without taking any money from PACs or federal lobbyists. Instead, we're counting on you; on folks across America who want to take their country back and steer us to a better course.
You've sent an unmistakable message to the political establishment in Washington about the power and seriousness of our challenge.
But for all the impressive numbers by which pundits will judge this campaign, we know that every step of our progress happens one person at a time.
One person sharing their story of why they decided to get involved in the political process, one volunteer deciding to have a conversation about the campaign with their neighbor, one donor owning a piece of this campaign for as little as $5.
I've been struck by how personal this campaign experience has been for so many of you.
You heard last week from Rashed, a veteran and father who made his first-ever donation to a political campaign because of his hopes for his daughter. This campaign is the story of hundreds of thousands of people like him -- people participating because they believe that politics can mean something again.
We've put together a small presentation about all we've accomplished together so far, and links to a few of the personal stories from people who donated to the campaign or hosted a community get-together this past weekend. You can see it here:
And we're only just getting started.
Thank you,
Barack Obama
Published in: Wall Street Journal, Thursday, April 5, 2007, page D2.
Link Officials Keep Some Health Care
This year's crop of proxy filings show that losing a job doesn't mean losing health-care for many corporate executives: Their former employers are on the hook for the coverage, sometimes for years to follow.
All workers get some protection thanks to a 1986 federal law that allows them to stay in the company plan when let go -- if they pay the full, unsubsidized cost. The law, the Consolidated Omnibus Budget Reconciliation Act, or Cobra, lets companies charge 2% for administration. That is unaffordable for most people, say most advocates.
Four out of five Cobra-eligible workers don't take the benefit, said Ron Pollack, executive director of Families USA, a Washington, D.C., advocacy group pushing to expand coverage of the uninsured. "The problem is that people eligible for Cobra have to pay the full freight -- and they have to do so at a time when they're unemployed and don't have the resources," Mr. Pollack said.
Companies have historically disclosed little about the cost of free health-care to fired executives. But the Securities and Exchange Commission's beefed-up disclosure requirements are shedding some light on the price tag.
Video-rental chain Blockbuster Inc. said this week that it could be on the hook for more than $27,202 in Cobra payments for medical and dental coverage for three years if it terminates Frank G. Paci, executive vice-president for strategic planning and business development.
Discount broker Charles Schwab Corp. would have to pay out $32,561 for 36 months of health-care for founder, pitchman and Chief Executive Charles R. Schwab should he be fired without cause.
Seattle-based insurer Safeco agreed to pay $15,000 in Cobra coverage to former president and Chief Operating Officer Michael LaRocco, who resigned in July.
A Blockbuster spokeswoman said that all company executives "would have it in their contract that the company would pay their medical coverage for the remainder of their contract." A Safeco spokesman declined to comment. A Schwab spokesman couldn't be reached to comment.
Write to Theo Francis at theo.francis@wsj.com
Published at: Link Obama Calls For Investigation Into Long Term Health Care IndustryApril 9, 2007 10:33 a.m. ESTAyinde O. Chase - All Headline News Staff
Ontario, CA (AHN) - Analysts of the nation's healthcare system say long-term care is the crisis of the 21st century and 3 out of 5 people will need it, while 2 out of 5 will require nursing home facilities.
According to Frank N. Darras, widely regarded as one the nation's leading disability and long term care insurance lawyers, the number of Long Term Care policyholders has increased 21 percent annually and now there are approximately six million LTC policies in the United States.
"Barack Obama has it right, and it is encouraging to see a presidential candidate focusing on truly helping hard working senior Americans. His call for an investigation into the fraud that is running rampant in the long-term care business is a step in the right direction," says Darras.
Obama recently released a statement saying, "we're going to end it because it's about time Washington stood up to insurance companies so that families and seniors across the country can get the care they deserve."
Following a report in the New York Times outlining the number of Long-Term care policies being undersold and under-priced. Obama wrote an open letter on March 29 to the head of the Government Accountability Office calling for an investigation into the high number of claims being denied, and practices that make it "difficult - if not impossible - for policyholders to get paid."
A portion of the Obama letter reads:
"First, I am concerned about the possible arbitrary denial of insurance benefits to seniors at their time of need. Second, I am concerned that some insurers may be enticing individuals to buy policies by offering low premiums, and then sharply increasing premiums if lapse rates are not as high as assumed in the premium calculations. Third, a substantial percentage of policies do not offer inflation adjustments, resulting in a significant erosion of purchasing power in later years.
Even worse, some companies offer "inflation coverage" which allows policyholders to purchase additional coverage at a later date, but at the price charged older purchasers. Premiums increase dramatically by age, and individuals who elect to buy coverage later may not realize that such coverage will be extremely expensive, which may be financially infeasible.
Some of the industry's practices Obama directly asked the GAO to investigate are listed below:
-- Rate of denial of claims, and as feasible, the extent to which denials were justifiable;
-- Types of policies purchased, including the percentage of policies that do adjust and do not adjust for inflation and those that allow for purchase of additional coverage at a later date;
-- Estimated loss of purchasing power for those individuals that have policies without inflation adjustment provisions;
-- Frequency and amount of premium increases in already purchased policies, average lapse rates of policyholders, and the correlation between premium increases and lapse rates;
-- Extent to which long-term care policies are marketed to individuals that would likely qualify for Medicaid or may not have substantial assets to protect; and
-- What, if any, additional federal regulation is needed.
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As we begin our discussions of improving health care for all Americans, we need to emphasize the quality of the care available at any one time and place, the priority of that care, and the new features and the new problems of our new health care.
In our planning, emergencies usually get our first first attention, especially in accidents, epidemics, and terrorist attacks.
Where we have time to prepare, we try to anticipate the health needs, as during preganany and birth, immunizations for infectious disease, and good diets with a minimum of polluting toxins.
Still later, we need to consider optimal exercise, education, and careers for all of children.
Underlying each of these priorities is the recognition that we are all Americans, on the same team, but that each of us is unique in our genes and DNA. Our uniqueness is a blessing, because it permits true diversity in our one nation. It also must be considered closely when we turn to gene-targetting medicines and stem cell transplantations.
We need to emphasize new forms of personal medicine, based on new knowledge about our bodies and about ourselves. We cannot remain isolated from each other, but we need to help each other in every medical situation.
With the conclusion of the first phase of the Campaign for Obama'08 on Saturday, March 31, we will be entering the new phase of Exploration of the Issues.
One important issue is the improvement of Health Care for all Americans, with especial emphasis on Access for All. Under the destructive policies of the Bush administration, access to medical care is now more difficult than ever before. The insurance companies insert themselves between the patient and the physician, then overload the physician with 10 minute visits, and then turn down approval of many necessary medications and procedures.
Clearly, medical insurance companies must be removed, and their profits returned to the care of the patients. Patients can be empowered by vouchers for arranging their own care.
A small, leafy, green suburb of Stanford University, Atherton, California is famous for its people, from Nobel Prize winners, to Corporate CEOs, to famous athletes, to poets, to artists, to musicians, and to passionate people in general.
We know how great the future will be, and we are determined that America will not lose that future.
It is necessary, from time to time, to save our country.
2008 is one of those times. We recognize that Senator Obama has the important goals that will ensure our country's future.
We will support him in 2008.
John H. Frenster, M.D.
![[Jeb Bush]](http://online.wsj.com/public/resources/images/HC-GJ122_Bush_20061203171237.gif)
