A proposed “gainsharing” arrangement between a hospital and several cardiology groups would violate federal statutes, according to an advisory opinion from the Department of Health and Human Services Office of the Inspector General (OIG). However, OIG will not seek sanctions against the hospitals or cardiology groups because the proposed arrangement includes proper safeguards to protect against inappropriate reductions in services. Under the proposed gainsharing arrangement, a hospital would share with each of eight cardiology groups a percentage of the hospital's cost savings from the cardiology group's implementation of a number of cost reduction measures in cardiac catheterization laboratory procedures. The Office of theInspector General found that the arrangement would amount to an improper payment to induce reduction or limitation of services and would potentially generate prohibited remuneration under the antikickback statute. However, OIG will not take action because the arrangement includes safeguards such as utilizing historic and clinical measures to establish a floor for savings to any cardiology group. The proposed arrangement is transparent and would allow for public scrutiny and individual physician accountability for any adverse effects, according to the OIG opinion. “Simply put, many 'gainsharing' plans present substantial risks for both patient and program abuse—risks that are not present in the proposed arrangement,” according to the OIG opinion. The advisory opinion, which is available online at
A group of former top federal health officials has asked a federal court to order the major tobacco companies to fund an independent public education and smoking prevention campaign directed at children and teens. In February, as part of an ongoing government case against the tobacco companies, the U.S. Court of Appeals for the District of Columbia Circuit ruled that the government could not require the companies to turn over $280 billion in profits. However, the court offered the option of pursuing other remedies. The Citizens' Commission to Protect the Truth—a group of former U.S. secretaries of Health, Education, and Welfare, U.S. secretaries of Health and Human Services, U.S. surgeons general, and directors of the Centers for Disease Control and Prevention—submitted an amicus brief to the court offering the option of requiring the tobacco companies to fund the American Legacy Foundation's truth campaign. The truth campaign is the largest national youth smoking prevention campaign in the country.
Cost of New Drug Benefit
National health care spending costs will remain stable over the next 10 years, although public programs will account for half of total spending, in part because of the new Medicare Part D prescription drug benefit, according to a report by the Centers for Medicare and Medicaid Services. The agency claims that the drug benefit—which kicks in in January—is expected to “significantly” increase prescription drug use and reduce out-of-pocket spending for older patients without causing any major increase in the health care spending trend. However, the new benefit will result in a significant shift in funding from private payers and Medicaid to Medicare. Medicare spending is projected to grow almost 8% in 2004 and 8.5% in 2005, due to several changes in the program under the Medicare Modernization Act, such as positive physician updates and higher Medicare Advantage payment rates.
Clinical Trial Registry Legislation
Sen. Chuck Grassley (R-Iowa) and Sen. Christopher Dodd (D-Conn.) have introduced legislation to require drug makers to register clinical trials about prescription medicines. The bill is similar to legislation Sen. Dodd introduced in the last Congress, but it stipulates that
Perceptions of the Drug Industry
Prescription drugs may be improving patients' lives, but 70% of 1,201 adults polled in a Kaiser Family Foundation survey thought the drug industry cared more about profits than people. Only 24% thought the companies were most concerned with developing new drugs that save lives and improve quality of life. People also blame drug companies for rising health care costs: Nearly 60% said prescription drugs increased overall medical costs because they were so expensive, compared with the 23% who said drugs lowered medical costs by reducing the need for expensive medical procedures and hospitalizations. In an earlier poll, Kaiser found that people were more likely to cite drug company profits than other causes as the major cost of rising health care. While not as popular as physicians or hospitals, drug companies were in fact viewed more favorably than oil or tobacco companies, according to the survey.