Kansas Health

Greg Scandlen in Kansas City



Greg Scandlen of The Galen Institute will be returning to Kansas to speak at The Medical Society of Johnson & Wyandotte Counties Consumer Driven Health Fair on Wednesday, January 26, 2005.

Panel speakers will include Beverly Gossage of Olympic Financial Marketing, Craig Keohan of MSAver, and William Short of United Missouri Bank.

Register online or by contacting Flint Hills at (316) 634-0218 or by contacting the Medical Society of Johnson & Wyandotte Counties at (913) 432-9444.

States to be forced to "find ways to save money" on Medicaid

[Alan Fram, "Bush budget proposal will likely target Medicaid, other benefits," Associated Press, The Lawrence Journal-World, 22 January 2005.]

Signs and signals continue to emanate from Washington that the rules of the Medicaid game are about to change. State policymakers need to be preparing now so that they will be ready:

President Bush is readying a new budget that would carve savings from Medicaid and other benefit programs, congressional aides and lobbyists say, but it is unclear if he will be able to push the plan through the Republican-run Congress.

White House officials are not saying what Bush's $2.5 trillion 2006 budget will propose saving from such programs, which comprise the biggest and fastest-growing part.

But lobbyists and lawmakers' aides, speaking on condition of anonymity, said he would focus on Medicaid, the health-care program for low-income and disabled people. Medicaid costs are split between Washington and the states.

Many expect him to propose giving states more flexibility in using the $180 billion in federal Medicaid funds each year, but to limit the program's growth on a per-patient basis -- in effect forcing the states to find ways to save money.

Conservatives may want to go even further than whatever savings Bush proposes. Many of them consider Bush's goal of halving the budget deficit by 2009 too timid, and see the coming retirement of the 76 million baby boomers as threatening to snowball federal spending.

[Matthew Hisrich, "Revamp Medicaid," Letter to the Editor, The Hutchinson News, 8 January 2005.]

Restoring nursing home viability

[Stephen Moses, "So What If the Government Pays for Most LTC, 2003 Data Update," LTC Bullet, The Center for Long Term Care Financing, 19 January 2005.]

Purchase of long-term care insurance continues to be a low priority for most people. At the same time, the quality of nursing home care continues to be a concern, and some facilities are shutting down as a result of being unable to turn a profit. As Center for Long Term Care Financing president Steve Moses explains in this recent piece, these two issues are bound together:

America spent $110.8 billion on nursing home care in 2003. The percentage of nursing home costs paid by government (mostly Medicaid and Medicare) has been going up for the past 15 years (from 49.6% in 1988 to 58.5% in 2003, up 8.9% of the total) while out-of-pocket costs have been declining (from 38.5% in 1988 to 27.9% in 2003, down 10.6% of the total).

So what? The consumer's liability for nursing home costs has gone down precipitously (from 38.5% in 1988 to 27.9% in 2003, a decline of 27.5%), while the government's liability has increased dramatically (from 49.6% in 1988 to 58.5% in 2003, a rise of 17.9%). No wonder people are not as eager to buy LTC insurance as insurers would like them to be! No wonder nursing homes are struggling financially--their dependency on stingy government reimbursements is increasing while their more profitable private payers are disappearing.

Bottom line, people only buy insurance against real financial risk. As long as they can ignore the risk, avoid the premiums, and get government to pay for their long-term care when and if such care is needed, they will remain in "denial" about the need for LTC insurance. As long as Medicaid and Medicare are paying for a huge proportion of all nursing home and home health care costs while out-of-pocket expenditures remain only nominal, nursing homes and home health agencies will remain starved for financial oxygen.

The solution is simple. Target Medicaid financing of long-term care to the needy and use the savings to fund education and tax incentives to encourage the public to plan early to be able to pay privately for long-term care.


[Stephen A. Moses, "Project Proposal: Controlling Medicaid Long-Term Care Costs," The Flint Hills Center, January 2004.
Matthew Hisrich, "First Things First: Kansas Medicaid Program Must Get its House in Order Before Expanding Home-based Care," The Flint Hills Center, 20 August 2004.]

New mandate information available

[Victoria Craig Bunce and JP Wieske, "Health Insurance Mandates in the States 2005," The Council for Affordable Health Insurance, January 2005.]

The Council for Affordable Health Insurance just released this excellent update to their earlier report on the negative impact of health insurance mandates on affordability. Not only are the numbers updated, but they now include cost estimates on a mandate-by-mandate level. Kansas has 37 in all, and any politician who claims to be concerned about reducing the number of uninsured without tackling these is being disingenuous at best:

The Council for Affordable Health Insurance tracks the introduction and passage of health insurance mandates in every state. The information is broken down on a state-by-state basis into three categories: benefits, providers and covered populations. Totals for each state and mandate are also included. Thus anyone can easily determine how many mandates and which ones each state has passed.

It may be tempting to think that since a particular mandate doesn’t add much to the cost of a health insurance policy, there is no reason for legislators to oppose it. The result of this reasoning is that many states have 40, 50 or more mandates. Although one mandate may only increase the cost of a policy by 1%, 40 such mandates will price many people out of the market. It is the accumulated impact of dozens of mandates that makes health insurance inaccessible to people. Where health insurance may have been affordable, adding additional benefits to a comprehensive policy will price some people out of the health insurance market.


[Matthew Hisrich, "State Mandates reduce insurance affordability," The Flint Hills Center, May 2004.]

Sebelius to Canada: We need your drugs

[Associated Press, "Sebelius, other governors ask Canada not to ban prescription drug sales," The Lawrence Journal-World, 20 January 2005.]

Governor Sebelius has to be disappointed. Just after she announces her decision to join I-Save Rx and open the borders of Kansas to imported drugs, Canadian officials threaten to close theirs. It's unclear exactly what a handful of U.S. governors can offer a country facing the possibility of having its own supply curtailed, but Sebelius and others are going to give it a go anyhow:

Gov. Kathleen Sebelius and five other state governors will try to convince Canadian Prime Minister Paul Martin not to choke off cross-border sales of prescription drugs.

Sebelius and the governors of Minnesota, Wisconsin, Utah, North Dakota and Maine sent Martin a letter Wednesday asking for a face-to-face meeting in Ottawa.

Martin's government has been considering restrictions that would shut down Internet drug sales to U.S. customers seeking cheaper medications. It's an industry with sales of about $700 million last year.

Canadian Health Minister Ujjal Dosanjh has repeatedly outlined his concerns that "Canada can not be the drugstore to the United States." He fears the cross-border trade could cause drug shortages in Canada and threaten the country's regulated pricing system.

[Matthew Hisrich, "Sebelius Is Practicing Black-Market Politics," The Wichita Eagle, 10 December 2004.]

New Hampshire, Florida Medicaid reform proposals online

Florida Governor Jeb Bush and New Hampshire Health and Human Services Commissioner John Stephen both recently proposed sweeping changes to their respective state's Medicaid program as an answer to rising costs and low quality of services. These proposals are available online for those interested in learning more:

Empowered Care - Florida

“To fulfill our commitment to Florida's Medicaid program, we must transform it completely so that the number one priority is patient wellbeing and the last consideration is government control,” said Governor Bush. “Our proposals put the focus back on the patient by encouraging strong patient-doctor relationships and allowing competition in the market to drive access and quality of care up from current levels in the Medicaid system.”

- The transformation begins by empowering Medicaid participants to make choices about their own care. Health care providers will create benefit packages falling into a combination of three components: basic care, catastrophic care and flexible spending. Participants — with the help of choice counselors — will choose the plan that best meets their needs.

- Medicaid participants will be able to build a “bridge to independence” by “opting out” of Medicaid plans and using their state-paid premium to purchase insurance in the private market.

GraniteCare - New Hampshire

The cost structure of the existing Medicaid Program is unsustainable. Medical cost inflation, the aging population and an increase in consumers receiving care in costly settings have created a growth rate that will outstrip State and county ability to fund these services without sizeable and repeated tax increases or significant reductions in eligibility and benefits.

This challenge is one that each state faces. According to the National Association of State Budget Officers' annual State Expenditure Report, Medicaid has now become the largest single cost to states nationally.

GraniteCare proposes the establishment of health services accounts for all non-disabled Medicaid consumers above 133% of the federal poverty level. Each consumer will be given an individualized budget with two accounts, one for preventive services based on clinical guidelines, and one for use for non-emergency services. The preventive account will cover regular physician and dental visits, as well as immunizations. Finally, a catastrophic pool will be established to pay for emergency care, as defined by the legislature.

Is it true that the GOP plan "fits in very well" with Healthy Kansas?

[John Hanna, "GOP health plan proposes to lower prescription costs," Associated Press, The Lawrence Journal-World, 19 January 2005.]

From most accounts, the Governor's Healthy Kansas Initiative is at odds with the recently announced Senate GOP health care proposal. She seems to disagree:

A no-new-taxes health care plan offered Tuesday by Senate Republicans was quickly co-opted by Gov. Kathleen Sebelius, who said the GOP's alternative to her much more expensive proposal "fits in very well" with her ideas.

What is going on here? Likely for the sake of political expediency, Sebelius is choosing to join with the GOP rather than fight them. Calculating that a head to head fight over the plans might end in failure, she is attempting to present her plan as a complementary offering to the GOP's, and sell the state on the idea that both are essential to solving health care issues in Kansas. From a political standpoint, this is essentially logrolling. It makes more sense to give in on the Republican measures and still get hers passed than to risk Healthy Kansas forever being counted as a failure.

It's unclear whether the GOP will respond by agreeing to this trade - and the tax hike that goes with it - but hopefully legislators will see through the maneuvering and instead work to reduce spending in Medicaid and improve the availability of affordable health insurance through health savings accounts and mandate-free policies.

[Matthew Hisrich, "Additional Medicaid Spending is Irresponsible," The Flint Hills Center, 22 July 2004.]

HSAs make financial sense

[Tracy Byrnes, "Health Savings Accounts Worth the Investment," TheStreet.com, 13 January 2005.]

While there is some confusion in this article about the level of interest in HSAs, the author does make an excellent point:

What's not to like about HSAs? Contributions are deductible, the account accumulates tax-free, and withdrawals used for medical expenses are tax-free.

That's hard to argue with.

[Matthew Hisrich, "HSAs Are Increasing Americans' Health Coverage," The Topeka Capital-Journal, 26 September 2004.]

The ax finally drops

[Scott Rothschild, "State to lose $45 million in federal health care funds," The Lawrence Journal-World, 18 January 2005.
Dave Ranney, "Governor's health care plan likely to clash with Bush pledge," The Lawrence Journal-World, 16 January 2005.]

The GOP just released the details of their counter-proposal to Governor Sebelius's $50 million Healthy Kansas Initiative. The bottom line: no new taxes. While an initial review of the GOP proposal indicates more work can be done, the resolve to hold the line on spending comes at a key time as federal funds look increasingly scarce:

State welfare officials today said the federal government will reduce health care funds to the state by $45 million in a future appropriation.

And the total could end up being twice as much, officials said.

The so-called deferrals are the result of audits done by the federal Centers for Medicare & Medicaid Services of ways that the Kansas Department of Social and Rehabilitation Services drew down federal matching Medicaid dollars.

"It is a significant amount of money," said Gary Daniels, who is chief of the Kansas Department of Social and Rehabilitation Services.

He said another $40 million is in dispute, and there could be future disputes too.

Kansas Health reported on the likelihood of these shady accounting practices coming home to roost as early as last April, so it should come as no surprise that things are ending the way they are. While Governor Sebelius is trying to paint this as heartless, the truth is that the funding mechanisms states use to prop up broken Medicaid programs and "game" the federal government are irresponsible.

Incredibly, in the face of restricted federal funds and a commitment at the federal level to further budget cuts, Governor Sebelius still recommends expanding Medicaid and has embarked on a Quixotic quest against budget realities. Fortunately, some legislators are wising up to the situation:

In 2000, state welfare officials spent $608 million on health care for the poor.

Before this year ends, they'll spend more than $1.3 billion. That's a whopping 121 percent increase in five years.

"We cannot sustain that kind of growth," said Rep. Brenda Landwehr, a Wichita Republican and chairwoman of the House subcommittee charged with assembling the budget for the state's Department of Social and Rehabilitation Services.

"We're going to have to find a way to bring it under control," she said.

[Matthew Hisrich, "Staying the Course: Medicaid Reform in Kansas," The Flint Hills Center for Public Policy, January 2004.]

More questions about drug importation

[Jack Strayer, "Drug importation is not a viable long-term solution," The Dodge City Globe, 14 January 2005.]

NCPA health care expert Jack Strayer questions whether Canada drugs from Canada can meet American needs in this recent letter to the editor:

[S]avings from Canadian online pharmacies have been shrinking rapidly. In many cases, Internet entrepreneurs are forced to buy drugs at higher prices from traditional brick and mortar stores, only to turn around and sell them to American seniors.

But a serious reduction in savings isn't the only problem for pro-importation forces. Their model, the one they rely so heavily on as evidence the policy has potential for success, is nearing total collapse. The Canadian government is now seriously considering restrictions to cross-border sales. They range from the creation of a list of banned exportable drugs to the end of doctors co-signing prescriptions for patients they have never examined. The latter would effectively kill the system for good.

As if American patients needed more evidence that drug importation is not a viable long-term solution, Canada's Health Minister now says they simply will not be America's drugstore and cannot vouch for the safety of drugs that originate in other countries.

Prices are rising, our northern neighbors have serious concerns, and the system some U.S. politicians have hung their hats on now hangs itself by a thread. As a U.S. Surgeon general report found before any of these developments took place, prescription drug importation is a flawed and failing solution to high drug costs. It is time to look to safer, more effective means of making life-saving drugs more affordable.

More warning signs that federal Medicaid dollars may shrink

[Tony Pugh, "Medicare, Medicaid in dire financial states," Knight Ridder Newspapers, The Wichita Eagle, 13 January 2005.]

The states are not the only ones struggling to maintain bloated Medicaid programs. The federal government may act soon to put a stop the spending binge, and states need to act quickly to prepare:

Social Security may top the Bush administration's domestic agenda, but Medicare's financial problems are more dire and Medicaid's are more immediate.

Members of Congress, state lawmakers and local health officials nationwide are bracing for probable White House plans to cap or cut federal Medicaid funding in order to trim the federal budget deficit. The Bush administration could also revisit its failed 2003 effort to transform Medicaid into a block grant program, in which states would get a fixed amount of federal funding and would have to make up any program shortfalls themselves. Currently, if state Medicaid costs increase, federal funding increases to keep pace.

For Senate Budget Committee Chairman Judd Gregg, R-N.H., and House Budget Committee Chairman Jim Nussle, R-Iowa - both concerned about federal spending for benefit programs - Medicaid could be first in line for cuts, said Ron Pollack, president of Families USA, a liberal patient-advocacy group in Washington.

New NCPA articles underscore health policy priorities for 2005

[John C. Goodman, "Ten Easy Health Reforms," Brief Analysis No. 497, NCPA, 14 January 2005.
Laura Trueman, "Health Care Tax Credits for the Uninsured," Brief Analysis No. 498, NCPA, 14 January 2005.
Chris Moon, "Health care push begins," The Topeka Capital-Journal, 14 January 2005.]

On Thursday, Governor Kathleen Sebelius's health care adviser Bob Day attempted to explain to legislators why they should raise taxes and expand bankrupt state health care programs further:

Sen. Jim Barnett, R-Emporia, said he wanted to know whether the revenue generated from cigarette taxes would be able to sustain the health care program for the next decade. He said he has seen no evidence of that.

But Day said Department of Revenue estimates take into account people quitting smoking due to the tax.

"Good times and bad, the nice thing about addictions is that people still spend the money on it," he said. [Ed. Note: So, he is admitting the tax has little to do with reducing tobacco usage and is therefore simply a method of funding new efforts of questionable merit.]

Barnett, a medical doctor, also questioned whether the proposed expansion of government health care would affect many Kansans.

"My hunch is it's going to have a fairly minimal impact," he said.

Day said simply getting more people under health coverage will reduce some high medical costs people incur and then aren't able to pay off. Those costs drive up health care prices for everyone, he said.

While the Governor seems oblivious to the growing fiscal crunch faced by Medicaid and the significant problems with quality that exist currently, others are working to address these issues and provide legislators with a workable roadmap to real reform.

John Goodman at NCPA provides a list of ten key reforms at the federal and state level:

1. Roth HSAs for Seniors
2. HSAs for Medicaid
3. FSA Rollovers
4. Private Insurance Options for Medicaid
5. Make Health Insurance part of Minimum Wage
6. Employee Access to Portable Insurance
7. Insurance Options for Spouses and Dependents
8. Insurance Options for Part-time Employees
9. Fair Prices for Emergency Room Care
10. Flexibility for HSAs

Laura Trueman adds one more reform:

Support is growing for a proposed solution to the rising number of uninsured Americans: a health insurance tax credit. If properly designed and implemented, a tax credit would allow uninsured, low income individuals and families to purchase affordable, quality health insurance.

To be effective, a health care tax credit must meet some specific criteria: (1) It must be refundable for lowwage workers (that is, they get the subsidy even if they have no tax liability); (2) The credit must be advanceable, so that it can be used to pay monthly premiums as they come due, rather than a lump-sum payment received when tax returns are filed on April 15; (3) It must not come with costly mandates that raise the cost of insurance and price healthy people out of the market; (4) It must be widely available, so that the market is large enough to attract many buyers and sellers; (5) It must be limited in dollar amount so that it does not encourage wasteful spending; and (6) It should be compatible with Health Savings Accounts (HSAs).

New Hampshire also considering HSAs for Medicaid

[Kevin Landrigan, "Commissioner outlines Medicaid plan," The Nashua Telegraph, 6 January 2005.]

On the heels of Governor Bush's proposal to privatize Medicaid, word has now arrived that Southern states are not the only ones advancing consumer-driven care within their Medicaid programs. A bold plan in New Hampshire seeks to restore balance to the state's Medicaid program while empowering its enrollees:

Health and Human Services Commissioner John Stephen released financial estimates Wednesday for his ambitious plan to reform Medicaid that would restrict admissions of seniors to a nursing home and give low-income families a health savings account for their children’s care.

During the next two years, Stephen’s GraniteCare plan would save only about $13 million in state dollars. That’s 7 percent of the $180 million loss in federal Medicaid reimbursements, which led Stephen to study how best to overhaul the system.

But Stephen noted that by 2010, the savings would be $142 million in state dollars and an equal amount in federal spending that would be saved.

All these changes would not require higher co-payments from those who now receive services or cut anyone off a program they are now on, Stephen stressed.

"We hope to dispel the notion that GraniteCare is built on service cuts or reductions in eligibility," he said.

"This plan is based on changing the way we deliver services to make the Medicaid program sustainable for years to come."

Short-term and long-term goals for importation

[Jude Blanchette, "Reimportation of Medicines: Free Trade Is the Issue," Foundation for Economic Education, 12 January 2005.]

There is some truth in Jude Blanchette's recent criticism that some conservative and libertarian thinkers seem perhaps overly eager to jettison free markets when it comes to prescription drug reimportation:

The Heritage Foundation stated, “[The HHS] conclusions are a stunning vindication of the economic and safety arguments that opponents of importation have been making since the beginning.” Kevin A Hassett of the American Enterprise Institute proclaimed, “It might still be fashionable to support reimportation, but the [Commerce Department] study makes clear that it would be economically indefensible.” And one thing is expressly clear to the libertarian Competitive Enterprise Institute (CEI), “[W]hen we reimport drugs from foreign countries, we are actually importing their price controls.” Writing on the National Review website last week, Robert Goldberg of the Manhattan Institute thought the HHS report “a welcome breath of fresh air in the increasingly stale debate over drug importation.”

With few exceptions, it seems as though the entirety of the conservative movement and even some libertarians have come down in favor of a ban on pharmaceutical reimportation. This is unfortunate. Reimportation is nothing more than free trade in pharmaceuticals, and there are no good grounds for the U.S. government’s interfering with it.

The reality, though, is arguably a bit more complicated, as most problems become when government interferes with the marketplace. While it is true that wide open borders should no more be barred for pharmaceuticals than they should be for any other product, there is a difference between immediate and longer-term policy goals. In the case of reimportation, it is certainly the case that there are legitimate concerns over the safety of drugs - whether imported or domestic - given the existence of a government agency that has assured the public of the safety of pharmaceutical products for many years.

As well, it is worth noting that politicians who bolster their careers based on touting the potential benefits of reimportation schemes do so within the context of significant regulation of distribution and/or price either here or abroad, and thus rest their arguments on the disingenous foundation that these regulations will be able to continue in their current form once significant reimportation begins. If a restaurant offers a senior discount and all its customers go to great lengths to pretend to be seniors, then that restaraunt will either cease offering the discount, inflate its prices, or close up shop. It's hard to determine who wins in any of those scenarios, yet that is exactly what will take place should reimportation continue to expand its scope under the current regulatory environment.

Thus, while it is important to avoid reimportation as it is currently fashioned, free trade is the ultimate goal. Removing the barriers to the success of that trade begins with dismantling a regulatory regime that undermines consumer awareness and cannot deliver on its promises. Blanchett concludes with a similar diagnosis:

[R]eimportation is largely the byproduct of the regulatory state in which the FDA is forces an $800 million compliance cost on drug developers. It is here that our energies should be focused.

[Matthew Hisrich, "Sebelius Is Practicing Black-Market Politics," The Wichita Eagle, 10 December 2004.]

Consumer driven health options expand

[Julius A. Karash, "'Terrible trade-off' pits health care against other benefits," The Kansas City Star, 12 January 2005.]

As health care costs continue to escalate, employers are looking for ways to maintain coverage for their employees without going out of business to pay the bills. As Julius Karash points out in this article, consumer driven plans are increasingly seen as the answer to this dilemma:

Major U.S. employers anticipate a 12 percent increase in health-care costs this year, according to a survey of more than 500 companies released this week by the Hewitt Associates international human resources firm. But those companies say they can afford an increase of only 8 percent.

But Jack Bruner, Hewitt's national health-care practice leader, said more companies are moving beyond the more common methods for controlling costs — such as higher premiums for employees — toward more systemic changes such as consumer-driven plans and education and wellness programs.

Some companies are offering consumer-driven health plans to lower health-care costs. Such plans include tax-free health savings accounts, which must be combined with a high-deductible, low-premium insurance plan.

Chris Doyle, a spokesman for American Century Investments, said the company offers its employees a consumer-driven plan known as a personal care account. The company also provides exercise classes, a gym and workout area for employees and on-site screenings for blood pressure problems and skin cancer.

"It has slowed down our year-over-year costs," Doyle said. "Health-care costs have been growing at a double-digit rate for the past several years, so anything we can do to slow those costs down is a good thing."

If you are interested in the move to consumer driven health care, consider attending the upcoming Consumer Driven Health Fair put on by The Medical Society of Johnson & Wyandotte Counties. More information is available at The Flint Hills website: http://www.flinthills.org.

[Greg Scandlen, "Choice is revolutionizing health care," The Wichita Eagle, 28 September 2004.]

Florida takes the privatization plunge

[Diane Hirth, "Privatization of Medicaid eyed," The Tallahassee Democrat, The Wichita Eagle, 12 January 2005.]

The race to aggressively deal with out-of-control Medicaid budgets at the state and federal level is off, with federal agents swooping down on states to make sure everyone's numbers add up and states such as South Carolina and Florida working to implement a consumer-driven approach into the program:

Florida would stop shelling out dollars without limit for medical care for more than 2.1 million poor people and instead pay their insurance premiums, letting them shop for their own health plans, under a sweeping reform plan unveiled Tuesday.

The goal is to tame Medicaid costs and give Medicaid patients choices, with the sweetener of extra spending money for items such as pedometers and blood-pressure cuffs if patients lose weight or quit smoking.

Rejecting the current program as "a broken system that creates barriers for patients," the governor promised: "In effect, we would pay the monthly insurance premium for everyone in Medicaid. ... Competing vendors will be allowed to offer different packages to consumers."

Kansas, unfortunately, remains at the starting line. While the Governor has chosen to punt on dealing with Medicaid this session, perhaps legislators will attempt to accomplish something significant. Both those on Medicaid and those paying the bills should hope for nothing less.

[Matthew Hisrich, "Revamp Medicaid," Letter to the Editor, The Hutchinson News, 8 January 2005.]

Red meat and cancer - let's not overreact

[Ed Edelson, "Steady Diet of Red Meat Increases Colon Cancer Risk," MSN Health, 11 January 2005.]

The latest scare in diet news is that eating red meat increases the chances for colon cancer, but as usual, it helps to put things in perspective:

A 20-year study of more than 148,000 adults aged 50 to 74 found those with the highest consumption of those meats were 50 percent more likely to develop cancer in the lower colon than those with the lowest consumption. The report appears in the Jan. 12 issue of the Journal of the American Medical Association.

But meat consumption is "not in the same scale" with other risk factors for cancer, [Dr. Michael J. Thun, head of epidemiological research at the American Cancer Society] added. Smoking is the most obvious example, but he cited two other factors most people do not always associate with cancer -- obesity and physical inactivity.

"High meat consumption is associated with at most a 50 percent increased risk for cancer of the lower colon," Thun said. "Obesity doubles the risk for all colorectal cancer, as does lack of physical activity."

The society's recommendations for risk reduction include maintaining a healthy body weight and regular physical activity.

A more cautious approach is taken by Dr. Steven H. Zeisel, who is the American Institute of Cancer Research professor of nutrition at the University of North Carolina, Chapel Hill.

"Moderating red meat intake makes sense in terms of reducing the risk of colon cancer," Zeisel said. "But I don't think that anybody says that eating red meat now and then would increase the risk of cancer. There's no need to become a vegan or make drastic changes in diet. I would be moderating my intake a little more than I would have moderated before."

More of the same

["Governor urges action on health care, education," text of Governor Kathleen Sebelius's state-of-the state speech, The Wichita Eagle, 10 January 2005.]

Governor Sebelius presented her annual state of the state address yesterday and her budget today. Unfortunately, while her rhetoric emphasized the importance of education and health care reform, little in the way of content supported all of the talk.

What she did propose is revealing. The emphasis of the discussion on health care centered on rising costs. The emphasis of her solutions were on rising costs in the private sector, even though public costs are what a politician preparing a budget should be focused on, especially considering the dramatic rise in public spending through Medicaid.

In fact, upon further examination of the text of her address, aside from a single mention of consolidating state purchasing power, every proposal involves what she deems a failure of the private sector or private individuals. As she tells legislators, "it's time for us to do something about it."

The reality is, though, that it is the public sector that is to blame for many of the problems facing health care. More of the same will only make things worse. Whether it is the uninsured, prescription drug costs, administrative costs or tobacco use, the public sector should remove the planks from its own eye before working on splinters elsewhere.

Medicaid is a broken program that is projected to overtake the entire budget of Kansas in the next few years, and yet the only mention it receives in her address was to point out that she would fight any cuts from Washington. Bold moves in the budget? Nada.

Governor Sebelius may try to play the part of a strong leader forcing the legislature to act, but the truth is she's merely passing the buck.

[Matthew Hisrich, "A Backgrounder on Kansas Medicaid," The Flint Hills Center, 19 July 2004.]

Medical malresult insurance

[Thomas Szasz, " Malpractice vs. 'Malresult,'" Reason, 10 January 2005.]

Thomas Szasz offers a unique solution to the medical malpractice crisis in this recent column, pointing out that the root problem may in fact be an inappropriate expectiation of safety on the part of patients:

When a patient suffers an undesirable outcome as a result of medical care, the harm may or may not be the physician's fault. More often than not, the "malresult" is an "act of God." Nevertheless, malresults are now often attributed to and treated as cases of medical malpractice (negligence). Making medical malresult insurance available and expecting patients to use it would be a step toward more fully recognizing the commercial aspects and risks of the medical situation.

Sooner or later, we shall have to confront our inconsistent expectations from modern medical technology. We demand, as a "right," the accurate diagnosis and effective treatment of disease; but when, in the process, we suffer, we feel medically and legally wronged and take to the courts. Rights and responsibilities cannot be disjoined forever. It is a delusion to believe that we can continue to assume medical risks without assuming responsibility for the harms we suffer as a consequence. The availability of insurance for malresult would radically change the medical tort litigation scene: it would place some of the responsibility for risks inherent in medical diagnoses and treatments on patients, where it rightfully belongs.

Medicaid care management program pays off in Florida

[Susan Konig, "Florida, Pfizer Team up to Improve Medicaid Patients' Use of Health Services," Health Care News, The Heartland Institute, 1 January 2005.]

The state of Florida recently took a gamble that by spending more time tracking Medicaid beneficiary drug use, the program could end up spending less. The decision is reaping rewards both in terms of budget savings and improved health outcomes:

The State of Florida and Pfizer Inc. announced in November they have contacted nearly 150,000 Medicaid beneficiaries with serious medical conditions and worked to monitor and improve their health through the Florida: A Healthy State program. When the program was launched in 2001, it was expected to reach just 50,000 Medicaid beneficiaries.

The program provides innovative patient education and nursing care to high-risk, targeted Medicaid patients through a statewide network of community hospitals, civic organizations, and patients' advocate groups. It cut the growth in Florida's medical costs by $41.9 million during a 27-month period ending in September 2003, according to Medical Scientists Inc., an independent organization that examined the results of the program. The firm's report was released November 9.

In addition, the state government received about $19.2 million in Pfizer investments and medicines donated by the firm. In all, the program generated $2.18 of medical claims reductions for each dollar invested in the program, according to the Medical Scientists report.

"I personally see the impact this program continues to have on the lives of real people in our community every day," said Michael L. Howell, MD, MBA, medical director of Florida: A Healthy State. "Patients are able to learn the tools necessary to adequately manage their chronic illnesses in ways that emergency rooms and acute inpatient hospital stays can never achieve. And it is because of the personal level of the training and the learning processes that this program is able to succeed."

Risk, reward and the FDA

[Gregory M. Lamb, "Drug tests: too speedy - or safe enough?," The Christian Science Monitor, 6 January 2005.]

With news headlines filled with stories of drug recalls and warnings, some are beginning to question whether the FDA is fulfilling its role:

As Americans try to figure out how suspect drugs got into their medicine cabinets - and who is to blame - two startling facts are coming to the fore: 1) The consumption of all medications involves some risk and 2) The bar for establishing their safety is set much lower than many people think. Furthermore, some experts say, these risks are almost impossible to avoid.

The seeds of the current crisis were planted more than a decade ago when Congress, under public pressure, directed the federal Food and Drug Administration (FDA) to make speedy approval of new drugs, rather than safety testing, its priority.

"It's a common misperception that the FDA approves drugs that are safe and effective," says Kenneth Kaitin, director of the Tufts Center for the Study of Drug Development, a nonprofit research group affiliated with Tufts University in Boston. "The FDA actually approves drugs where the expected benefits outweigh the expected risks of that drug. It's always a risk-benefit analysis."

In the 1970s and '80s, the FDA had an "overly cautious approach to drug approval," in the view of Dr. Kaitin. Research by his center at Tufts showed the United States trailed behind other countries in developing new drugs, a so-called "drug lag."

The AIDS epidemic of the late '80s helped stir public thought to demand rapid drug development, he says, and Congress responded by giving the FDA new latitude to speed up the process, including fast-track approvals.

Today no new epidemic is causing a widespread public outcry so the pendulum has swung back toward safety concerns, Kaitin says.

"You can't have it both ways," says Mr. Weisman. That means choosing between a long approval process or bringing valuable new drugs quickly to the market, he adds.

Perhaps it would be good to step back and consider for a moment the incentives at work within an agency such as the FDA. The goal from the perspective of the FDA is to avoid negatives. There is no reward for releasing a successful drug, improving lives, etc., as in the private market. There is, however, risk in being blamed for a drug that may lead to complications. As mentioned above, this is virtually impossible to avoid so the incentive would naturally be to never release anything. The agency is also exposed to political risk if it fails to release drugs that may be helpful, though. Seen from this angle, it is easier to understand the actions of the agency - the goals have less to do with the betterment of society than security within the organization. Standard bureaucratic behavior.

The question is just because a government agency acts in response to negatives, does the rest of society? Must we continue to fund a body that shifts its priorities between releasing potentially dangerous drugs and not releasing potentially beneficial drugs based on changing political tides?

Certainly, there are side effects to some drugs that do not reveal themselves except over long periods of use, or when used in conjunction with other products, or when misused by those taking them. The fact is, though, that this is the case with many products. If an agency is essentially powerless to prevent such problems without destroying a market by requiring testing for every possible scenario, then what is its value? If we applied a similar "precautionary principle" to every product on the market, would we be better off? These are the kinds of questions policymakers must ask before engaging in another round of reforms at the FDA.

Enough is enough

[Robert Pear, "Administration looks to curb growth of Medicaid spending," The New York Times, 20 December 2004.]

State governments have been keeping themselves busy with Commissions and Task Forces on Medicaid, but little progress has actually been achieved. Meanwhile, costs continue to mount and officials at the federal level - where 60 percent of Medicaid funding comes from - are losing patience:

Federal officials are sending auditors to state capitals across the country to investigate techniques used by states to shift hundreds of millions of dollars in Medicaid costs to the federal government.

Medicaid, originally intended for the poor, has been expanded in some states to cover families with incomes up to twice the poverty level. But the limit on co-payments is still $3 for a prescription drug, regardless of a family's income.

Lawmakers have talked of overhauling Medicaid for a decade, but a confluence of forces has added new urgency to the debate, which will begin in earnest when Congress convenes next month.

Medicaid spending shot up 63 percent in the past five years. With more than 50 million beneficiaries and more than $300 billion a year in combined federal and state outlays, Medicaid is now bigger than Medicare. For prescription drugs alone, Medicaid spending soared to $34 billion in 2003, from $13.6 billion in 1998.

Bush has vowed to cut the federal budget deficit by half in five years, and Republican leaders in Congress say that goal will be virtually impossible without touching Medicaid.

The growth of Medicaid has outstripped the growth of state revenues and is putting pressure on other state programs. This year, for the first time, Medicaid was a larger component of state spending than elementary and secondary education combined, the governors association said.

The release of a new report from The Center for Long Term Care Financing comes at an excellent time. According to "How to Save Medicaid $20 Billion Per Year AND Improve the Program in the Process":

The single most effective step Congress and the President can take to fix Medicaid, reduce its cost, and improve America's long-term care service delivery and financing system is to replace Medicaid's home equity exemption with a reverse mortgage as a pre-condition of eligibility.

That simple measure will pump desperately needed financial oxygen into the LTC service delivery system, relieve the burden of Medicaid on taxpayers, enable Medicaid to provide better access to higher quality care for the genuinely needy, and supercharge the market for LTC insurance and home equity conversion products.

[Matthew Hisrich, "Kansas Needs Bold Medicaid Reform," The Wichita Eagle, 21 January 2004.]

First painkillers, now pop

[S. Jhoanna Robledo, "Soda drinkers beware?," MSN.com, 5 January 2005.]

A new study attempts to link drinking soda pop with esophageal cancer, but as with the naproxen / stroke link, the evidence is pretty thin:

For years, carbonated soft drinks have gotten a bad rap from dentists who say most of them are sugar-laden and encourage the growth of cavities. Nutritionists have blamed sodas in part for the obesity problem in America, saying they're full of empty calories. Now a team of digestive-disease doctors at a hospital in India are once again taking the fizz out of the popular drinks, declaring in a recent study that sodas may also be linked to esophageal cancer. Given this recent finding, should you skip sodas for good?

Not necessarily, says Dr. Philip Jaffe, a gastroenterologist who teaches at the University of Connecticut Health Center. "The study is intriguing, but like all epidemiological studies, it has its limitations," he says. The problem is one of association. In the study, researchers cited U.S. data that showed per capita consumption of carbonated drinks rose by more than 450 percent from 1974 to 2000, from 10.8 gallons on average to 49.2 gallons in 2000. During that same period, the incidence rates of esophageal cancer rose by more than 570 percent in white American men. While the two trends may be associated with each other, however, some outside experts say the connection is tenuous.

Some of the harshest criticism comes from the soft-drink industry.

"I don't think this study has any scientific merit," says Dr. Richard Adamson, vice president of scientific and technical affairs for the National Soft Drink Association, a trade group that promotes the industry. "They looked at numbers and didn't establish a causal link."

Adamson says that because study authors didn't dig further to see if those diagnosed with the cancer also drank the beverage, asserting that sodas may cause esophageal cancer is a considerable reach. According to Adamson, people also ate more pizzas over that time span; cell phone and computer use skyrocketed as well. And yet, he points out, researchers didn't correlate those behaviors with esophageal cancer.

The bottom line? "Don't take the news about soda and esophageal cancer to heart," says Jaffe, who gave precisely that advice to a patient who swore he was going to give up the fizzy brew after hearing about the research from India. "If part of what makes life enjoyable for you is having a couple of Diet Cokes, then go ahead. Life is short and there are worse habits to have. You have to put everything into perspective."

Unfortunately, that advice is unlikely to become a headline anytime soon...

New slogan to solve budget problems

[Scott Rothschild, "Kansas to begin 2005 in the black," The Lawrence Journal-World, 5 January 2005.
Scott Rothschild, "New state slogan not as secret as thought," The Lawrence Journal-World, 5 January 2005.]

The good news is that the new legislative session is opening with a budget that is in the black, but there are still plenty of hurdles to overcome:

When Kansas lawmakers return Monday for the 2005 legislative session, the state will have recorded a balance of about $327 million in its reserves, which is 7.6 percent of expenditures.

"We're making some progress, but we still have these cost drivers," said Senate President-elect Steve Morris, R-Hugoton, who was chairman of the Senate budget committee.

Caseload increases in Medicaid have grown by about $400 million over the past five years; the state's contribution to the state pension system and debt payments on pension bonds are accelerating, and in next year's budget the state will start paying off research bonds at regents universities.

Pension payments and Medicaid "are the two biggest obstacles we have in being able to have more flexibility in our budget," Morris said.

In addition, the state base aid per pupil in public schools has remained at the same level for the past four years. On Monday, the Kansas Supreme Court ordered an unspecified increase in public school funding, which makes up about half of the state budget.

Fortunately, state officials are one step ahead of the game, planning to unveil a new state slogan on Friday that will attract business and investment and take the state's economy to new heights:

"KANSAS. As big as you think" will be the slogan anchoring a drive to boost the image of Kansas and attract more tourists and businesses.

State budget staff said the Commerce Department received $700,000 in economic development funds from lottery sales for the state brand image campaign. Lunsford said the final tab for the project could be more, but she declined to provide any further information about the project prior to Friday's news conferences.

Canadian supply lines may be cut

[Peter Wallsten, "Canada May Alter Its Policy on Sale of Drugs," The Los Angeles Times, 5 January 2005.]

Speculation has been floating around for months now that either drug companies would stop shipping so many drugs to Canada or Canada would stop shipping so many drugs to the U.S. Drug companies have implemented some minor restrictions, but news just hit that Canada is considering preventing pharmacies from selling to customers abroad altogether:

Canada might soon prohibit pharmacies from selling prescription drugs to mail-order customers — a move that would cut off a market that is increasingly popular with U.S. seniors eager to take advantage of Canadian price controls that make drugs there far cheaper than at home.

It is technically illegal for Americans to import drugs from abroad, but they do so anyhow in big quantities — about 10 million shipments a year, valued at $1.5 billion. Half of that business is from Canada.

Residents of other industrialized countries pay less for pharmaceuticals because those governments enact price controls, limiting what drug makers can charge.

Drugs from Canada, for instance, cost about 40% of their price in the United States.

That's brand-name drugs, of course, not generics. In any case, this move may stave off a policy clash between the U.S. and Canada, but it will likely only exacerbate the safety issue as Americans shift their attention elsewhere for prescription drugs. The drug issue requires some serious thinking on the part of policymakers before it will be adequately resolved.

[Matthew Hisrich, "Sebelius Is Practicing Black-Market Politics," The Wichita Eagle, 10 December 2004.]

More hospital pricing controversy

[Laurie Roberts, "Hospitals pad patients' bills because they can," The Arizona Republic, 1 January 2005.]

The fact that hospitals routinely charge the uninsured far more than those with insurance has raised the attention of the media and even the threat of legal action. More trouble for hospitals seems on its way as tales on par with the $600 toilet seats at the Pentagon begin to surface:

Comes now the sequel to the great T-shirt scam of 2004.

You may recall the story of 14-year-old Matt Blumenreich and the unfortunate slide into home plate that left him with a fractured vertebrae and his father, Alan, with an even bigger pain: the bill.

To wit: two "torso socks" (read: T-shirts) that cost $278 apiece, courtesy of Phoenix Children's Hospital.

A hospital spokeswoman declined to discuss it, citing patient privacy, and in fact, declined even to talk in general about how a glorified T-shirt, one that retails for under $20, could possibly cost $278. She did say the hospital would be contacting Blumenreich.

They did. The message: Pay up. "The story is that they've looked into it," Blumenreich said. "They've checked out the amounts, and this is what the stuff is charted at, and Blue Cross didn't have a problem, and therefore you shouldn't have a problem, so pay your bill."

To be fair, Phoenix Children's isn't the only medical outfit to don a mask when it mails out the bills. After writing about the $278 T-shirts, examples poured in. There was the $28 toothbrush. The $61 IV needle (not the bag, not the tubing, not the medication, just the needle). There was the $19.95 raised toilet seat that suddenly cost $96 when the drugstore billed Medicare.

There was the $57 paper hospital gown and the $265 gelatin sponge. "That's got to be some fancy sponge," said Rick Hallick, who got zinged for both during a recent stay at Tempe St. Luke's.

Hospital administrators must begin to address the public relations storm headed their way. As consumer-driven health care options increase, however, price transparency will become far more in demand and this type of abuse will be more difficult to perpetrate.

Ibuprofen and naproxen not so bad after all?

[Alan Reynolds, "Painkiller panic," The Washington Times, 2 January 2005.]

It might be easy to understand people going through their houses and throwing out all of the Aleve and Advil after hearing news that relieving a head or back ache could result in a heart attack or stroke. As is often the case with over-the-top media reports, however, the reality is a bit more complex:

Depending on which of two recent studies you may have read about, you might suppose the pain reliever Alleve (naproxen) will either reduce or increase the risk of heart attacks.

On Dec. 13, the Financial Times reported, "Widely used anti-inflammatory drugs such as ibuprofen and naproxen could help reduce the risk of heart attacks, while abruptly halting the usage increases the risks, according to a large U.K. study."

On Dec. 21, The Washington Post dished out the opposite advice, noting, "Federal officials announced that naproxen, a painkiller sold by prescription and also over the counter as Aleve, might increase people's risk of having a heart attack."

What the press described as a "quick review of the data" in the United States may have suggested...I should stop using naproxen or risk a heart attack. But the larger British study said stopping naproxen would risk a heart attack. So, I decided to take a closer look at the U.S. version.

It turns out that in a study of about 2,400 older people, 70 of those using naproxen had some "cardiovascular event," such as a stroke or heart attack, but only two or three died. The 70 was said to be twice the rate among those taking a placebo. Press reports promptly ascribed that minor difference (1½ percent) to the added risk of taking a large daily dose of naproxen for three years.

For all we know, the difference might be because those taking naproxen ate fatter foods than most other participants, exercised less, were older, had worse family histories or smoked more cigarettes. Nobody said these other risk factors were properly taken into account, so the quick review lacks statistical credibility.

The hullabaloo about questionable risks from chronic overuse of such beneficent drugs as Celebrex and Alleve may yet cause truly serious health risks if it contributes to the terrifying FDA urge to deny doctors and patients timely access to vital drugs.

New year, old problems, new opportunities

[David Klepper, "Health care takes center stage at Kansas Legislature," The Kansas City Star, 29 December 2004.]

As the health care financing crisis grows more severe, it is increasingly engouraging to see that state leaders in Kansas are beginning to acknowledge the problem and act. Following on the heels of Governor Sebelius's Healthy Kansas initiative, Kansas legislators are now weighing their options for dealing with health care costs, as well.

Republican leaders have not formally proposed anything, but they say they are looking into health savings accounts, in which workers and employers would contribute money to a tax-free savings account set up for medical expenses.

Reducing health-care costs was identified as the No. 2 priority for the upcoming legislative sessions in all 50 states by the National Conference of State Legislatures. Continuing budget restraints was the No. 1 issue.

Kansas' economic picture is brighter this year, but few expect to be able to cover the state's medical bills without raising revenue or restructuring the system to cut costs.

“Medicaid is eating us alive,” said Senate President-elect Steve Morris, a Hugoton Republican. “The cost of premiums keeps going up. It's putting pressure on small business and on the state. We all agree on this much: It's a big problem and it's getting bigger. Health-care issues are here to stay.”

Nationwide, more than $270 billion is spent annually on Medicaid, the nation's largest health-care program.

The announcement today that Kansas legislators "must" spend more on education will no doubt overshadow this growing problem, however. Let's hope that legislators follow the Governor's request to tackle both issues this session.

[Stephen A. Moses, "Project Proposal: Controlling Medicaid Long-Term Care Costs," Submitted to Members of the Kansas State Legislature, The Flint Hills Center, January 2004.
Matthew Hisrich, Staying the Course: Medicaid Reform in Kansas, The Flint Hills Center for Public Policy, January 2004.]