Lab Soft News

Cities Begin to Question Non-Proft Status, Tax Breaks of Their Hospitals

I have long had reservations about the tax breaks accorded to hospitals in the form of their non-profit status (see: Non-Profit Hospitals Drift from Their Mission Despite Subsidies; Why Are Many Hospital CEOs Paid So Handsomely?).  From where I sit, many behave more like vigorous for-profit enterprises. A recent article in the NYT raised this topic in an  informed way (see: Benefits Questioned in Tax Breaks for Nonprofit Hospitals). Below is an excerpt from it:

The billions of dollars in tax breaks granted to the nation’s nonprofit hospitals are being challenged by regulators and politicians as cities still reeling from the recession watch cash-rich medical centers expand. Hospitals, among the largest landowners in many communities, are often designated as nonprofits, allowing them to benefit from state and federal tax breaks for providing “charity care and community benefit.” The exemptions collectively amount to more than $12 billion annually, health economists say. Now, provisions of the Affordable Care Act, along with Internal Revenue Service reporting requirements imposed in recent years, are revealing how much medical centers give back to their communities. And many health experts have found them wanting...A study this year in The New England Journal of Medicine found that hospitals spent an average of 7.5 percent of their operating costs on charity care and community benefit, based on filings the I.R.S. has required only since 2009. Some spent under 1 percent and others about 20 percent. What’s more, the I.R.S. allows hospitals to use broad definitions of community service, including the value of traditional charity... and the money hospitals calculate they lose because Medicaid reimburses them less than their costs. Hospitals can also take credit for hosting health fairs, operating some research labs and “donating” their executives’ time to serve on local community boards....

The federal government has not specified the amount of benefit a hospital should provide to be exempt from federal taxes, though their status will now be subject to review every three years under the new health care law. But states and cities are already poised to make demands....In a case that is being closely watched, Pittsburgh this year filed suit challenging the University of Pittsburgh Medical Center’s tax-exempt status, saying that the medical center should pay some payroll taxes and more property taxes, estimated to total about $20 million annually....[The city's lead lawyer] said that the hospital failed most, if not all, of Pennsylvania’s criteria for a tax-exempt charity, and that its annual report described it as a “$10 billion global health enterprise,” with excess operating revenue of nearly $1 billion and reserves of more than $3 billion. The institution paid 20 executives more than $1 million annually, he said. Despite a charity policy, the hospital made little effort to take care of poor people except in emergencies, he asserted, spending only about 2 percent of its net patient revenues on charity care.

The solution to this problem seems rather simple to me but I am sure that it would be very hard to implement. The reason for this is that hospitals can command a powerful lobbying force on their behalf, particularly in small towns where they may be the major employer. If their non-profit status is threatened, they would threaten to  lay off employees and the local and state politicians would rise in their defense. However, look at the example above where the city of Pittsburgh is suing the UPMC regarding its tax-exempt status. The cities are so hungry for tax revenue that they are willing to challenge such a large and powerful an institution as UPMC.

How about requiring hospitals, in order to retain their tax exempt status, to deliver “charity care and community benefit" at a certain percentage of their operating budget? This percentage should be pegged somewhere around 10 to 20%. Hospitals should not be allowed to "game" this requirement. For example, everyone knows that the hospital billing rates are a fiction; no insurance company or Medicare reimburses these amounts. The hospitals should thus not be allowed to calculate their contributions to charity care at the level of these posted charges. Such an approach would not satisfy the cities in which these hospital are located who are seeking more tax revenue but it would definitely even the playing field to some degree.

Presidential Commission Report on the Management of Incidentalomas

I have posted  previous notes discussing incidentalomas (see: How to Avoid the Risks of a CT Incidentaloma; More (and Interesting) Discussion about Incidentalomas; How to Avoid the Risks of a CT Incidentaloma). They are commonly discovered by imaging studies such as CT scans or MRI and are unrelated to the reason for initially ordering the procedure. They are benign lesions that are frequently better unreported. The test ordering physician may feel compelled to treat then which can lead to complications that could have been avoided. Incidental or secondary findings may also be discovered in research projects or clinical trials. There is also a high likelihood that some direct-to-consumer genomic testing may reveal the presence of genetic defects, recently referred to as the incidentalome (see: Introducing the Incidentalome; Implications of Whole Genome Scanning). A Presidential Commission has just issued a report addressing such incidental and secondary findings (see: The Right to Know—or Not). Below is an excerpt from an article about this topic:

[T]he Presidential Commission for the Study of Bioethical Issues [has] issued a report containing recommendations for dealing with incidental or secondary findings uncovered in the direct-to-consumer (DTC), clinical, and research settings. “The importance of incidental findings, and the problem, is only increasing in magnitude,” commission member Stephen Hauser told reporters this week. “Each of us has scores of deleterious mutations in our genes and these will be picked up every time a whole-genome sequence is obtained.” And high-resolution imaging techniques often uncover unexpected abnormalities, he noted. What to do about unexpected health-related findings “is an issue that affects everybody,” commission chair Amy Gutmann said during the press briefing. In their report, Gutmann, Hauser, and colleagues propose that DTC companies, clinicians, and researchers ought to anticipate incidental findings that could come up and communicate them before procedures or tests are administered....Earlier this year, the American College of Medical Genetics and Genomics (ACMG) released recommendations outlining 57 disease risk-associated genetic variants that it said patients ought to be made aware of were they to arise during whole-genome sequencing (see: Patients Should Always Receive Their Genomic Information According to Recent Report). In contrast, the Presidential Commission for the Study of Bioethical Issues...emphasized the patient’s right to choose what they would and would not like to learn as a result of such a test. The commission does advocate for the creation of such disease-risk lists, however, to help providers assess what types of incidental findings are most likely to arise and communicate those with patients. Gutmann stressed that her group’s report is far from the final word on incidental findings.

In my mind, these various reports do little to put to rest this controversy about what patients/consumers should or should not be informed about after imaging studies, clinical trials, or DTC genetic testing. The notion that physician or researchers should "anticipate incidental findings" or provide patients with "disease-risk lists" prior to tests and procedures strikes me as naive. Informed consent forms, while legally necessary and appropriate, are frequently glossed over by patients and consumers. As diagnostic tests and imaging procedures grow more sophisticated, the challenges of incidentalomas/incidentalomes will continue to grow. At least thus far, commissions and societies weighing in on these matters had not produced practical solutions. However, I don't have any practical solutions to offer either.

Alzheimer's Amyloid Tangle Theory Will Be Tested with Merck Drug Trial

Various theories about the pathogenesis of Alzheimer's disease have been beset with controversy. To be more specific, it's not clear whether the amyloid tangles that are seen in the brain are the cause of the disease and  thus relevant for its treatment (see: In-Vitro Biomarkers vs. In-Situ Biomarkers; Diagnosing Alzheimer's Disease with Imaging and Biomarkers; Early Detection of Alzheimer's Disease: Mutations of Three Genes Studied; Brain Plaque Diagnostic Imaging Procedure Approved by FDA). The theory of amyloid tangles is now being put to a test in a drug trial (see: Alzheimer’s Theory That’s Been Drug Graveyard Facing Test). Below is an excerpt of an article about this topic:

Merck ...is putting the prevailing theory on the cause of Alzheimer’s to a test with two studies in thousands of people that may, once and for all, determine whether the amyloid tangles that grow in the brain spur the disease or are simply an outgrowth. Merck’s experimental drug, called MK-8931, reduces amyloid, a hallmark sign of the illness, by as much as 90 percent, an unprecedented effect. The new trials, announced this week following a three-month review in 200 patients, seek to enroll more than 3,000 people and will run from 18 months to two years. If successful, the trials would reverse an unrelentingly negative trend. Since 1998, there have been more than 100 attempts to develop an Alzheimer’s treatment, and all have failed. Such a product may generate as much as $5 billion annually [for] Merck, according to analysts, a boon for a company in the midst of eliminating one-fifth of its workers....The allure of the Merck drug is clear. People with naturally elevated levels of amyloid, a protein that occurs in the body, are at much higher risk, research has shown. A genetic study from Iceland last year found those with a mutation that blocks the BACE enzyme, the target of Merck’s MK-8931, appear to be protected from the disease. Scissors-Like BACE is an enzyme that works like scissors to release the sticky amyloid and create the characteristic plaques that build up in the brains of Alzheimer’s patients....(see: Enzyme BACE1 may be important in predicting onset of Alzheimer disease). While Merck is moving forward with final trials, safety issues this year derailed similar drugs from Indianapolis-based Eli Lilly...and Roche ....Those drugmakers have turned to different anti-amyloid therapies as they compete with Merck to become the first company with a treatment for the neurodegenerative disease....The earlier drug setbacks have caused some scientists and doctors to doubt a fundamental theory of Alzheimer’s: that amyloid plaque found in patients’ brains causes the disease. Others have argued the treatments tried weren’t strong enough or were given too late, once the plaque was present and the damage had been done. Merck’s studies are designed to resolve those issues.

The economic impact of Alzheimer's disease around the world is enormous. Here's some facts about the disease copied from the home web page of the Alzheimer's Association (see: Alzheimer's Facts and Figures):

• Alzheimer's disease is the sixth leading cause of death in the United States.
• More than 5 million Americans are living with the disease.
• In 2012, 15.4 million caregivers provided more than 17.5 billion hours of unpaid care valued at $216 billion.
• In 2013, Alzheimer's will cost the nation $203 billion. This number is expected to rise to $1.2 trillion by 2050.

So this Merck drug trial will be quite a gamble for the company, particularly in light of previous failures by other companies. However and obviously, the market is huge. If the drug is proven to be successful and given the cost of the disease, I am sure that the price for it will equal or exceed that of new chemotherapeutic agents. In short, the profits for the company will be enormous.

Virtual Radiologic Presents Itself in a Press Release as a Radiology Practice

I have posted a number of previous notes about teleradiology and the "nighthawk" industry it has spawned (see: NighHawk Radiology Services Enters Software Arena; Radiology Groups Begin to Develop Their Own "Nighthawk" Service Model; Tighter Integration of Nighthawk Reports into Hospital EMRs and RISs). Teleradiology interests me for many reasons but one of the most important is that we can apply lessons learned to telepathology as it evolves. Here's a recent press release from Virtual Radiologic (vRad) that's fascinating in terms of how the company presents itself (see: Virtual Radiologic Awarded Its 12th and 13th Patents). 

Virtual Radiologic (vRad), the nation's largest radiology practice, announced today that the U.S. Patent and Trademark Office has issued the Company's 12th and 13th patents....These patents are the latest in vRad's innovative approaches for streamlining radiology workflow that improves productivity by intelligently forwarding the right study to the right radiologist as quickly and cost-efficiently as possible," said Jim Burke, CEO of vRad. "As the nation's largest radiology practice, it is our responsibility to make the significant technology investments needed to advance the practice of radiology and provide the best service and care possible to our clients and the patients we collectively serve....Virtual Radiologic (vRad) is a technology-enabled national radiology practice working in partnership with local radiologists and hospitals to optimize radiology's pivotal role in patient care. vRad's more than 450 radiologists serve over 2,000 facilities, reading more than 7 million studies annually. Delivering access to extensive subspecialty coverage, vRad contributes to improved quality of patient care. And with its next-generation technology, vRad enhances productivity, helping to lower the overall cost of care while expediting time to accurate diagnosis and treatment.

In a kind of post-modern twist, vRad does not refer to itself as a teleradiology company but rather as the nation's largest radiology practice. The closest it gets to the "T" word (teleradiology) is to call itself "a technology-enabled national radiology practice working in partnership with local radiologists and hospitals." I think that the company goal here is for hospital CEOs across the country to regard it as analogous to the local radiology practice it might replace, although this new practice employs 450 radiologists. 

Virtual Radiologic is an interesting example of the progression to technology-driven Big Medicine (see: The Transition to "Big Med": Need for Emphasis on Standardization and Cost; Physician Private Practice Declines; the Last Barrier to Emergence of "Big Medicine"; The Institutionalization of Healthcare; Consequences of Big Medicine?). There are going to be winners and losers in the process as we move increasingly to Big Medicine. Inevitably, some hospitals will replace their local radiology groups. With all radiology images digital and thus portable, the local groups may not be able to compete with vRad. Another option, however, is for a local radiology group to supplement its call schedule with vRad radiologists at night and on weekends or utilize vRad specialty coverage like neuroradiology around the clock. This is sometimes called the hybrid radiology staffing model (see: Hybrid Model of On-Site and Remote Radiology for Enhanced Patient Workflow).

China Eyes Smoking Enhanced Smoking Cessation Programs

China has been lagging in smoking cessation programs due, in part, to the fact that cigarette sales account for a large percentage of government revenue. Moreover, there's not much of a national healthcare program so that the government doesn't bear the cost of the adverse health consequences of smoking. All of this may be about to change according to a recent article (see: China Eyes Smoking Ban). Here is an excerpt from it:

Chinese officials are exploring ways to curb smoking as deaths mount and medical costs rise, an effort that has generated one proposal to take apart the nation’s vast and politically connected government-run tobacco monopoly. Within the next year, China’s legislators will accelerate efforts to enact a national regulation banning smoking in public places in China....[A book has been released] by China’s Central Party School, an elite Chinese Communist Party think tank, in recent months urging officials to shake up China’s tobacco monopoly, which is responsible for tobacco production and sales and has the freedom to donate to schools and sell cigarette cartons without pictures of black lungs for warnings. Its authors call for higher tobacco taxes, halting government financing to tobacco companies and encouraging them to find alternative business models. China’s State Tobacco Monopoly Administration wasn’t immediately available for comment. The tobacco industry pulled in 865 billion yuan ($142.5 billion) from taxes and profit in 2012, up 16% from a year earlier, according to the State Tobacco administration. China is the world’s largest consumer and producer of tobacco, home to more than 300 million smokers and 43% of the world’s cigarette production, according to the American Cancer Society and the World Lung Foundation. Tobacco is also a leading cause of death in China, causing 1.2 million deaths annually and expected to cause 3.5 million deaths annually by 2030....The party-school book said the government should develop measures to deal with “conflicts of interest” between the tobacco industry and the government, that it should reform the tobacco industry and enforce lower production of tobacco. Health experts say policy recommendations and potential legislation are promising signs of structural change. But changing the current system won’t be easy. Beijing has said long said it is determined to tackle the country’s smoking problem, but so far has had little success. Cigarettes remain cheap, with many available for less than $1 a pack. The World Health Organization recommended last year that China triple its tobacco tax to 70% to discourage young would-be smokers from buying.

Talk about conflicts of interest. China now looks like ground-zero for cigarette smokers and cigarette production in the world. It's not going to be easy to address this problem because the government tobacco monopoly, considering taxes and profits, amounts to $142.5 billion dollars yearly. Clearly the WHO's recommendation of tripling the tax on tobacco makes sense because this approach has worked in most other countries or the prohibition. The prohibition of smoking in public places also makes sense (see: China considers nationwide ban on smoking in public). At some point in the very near future, the harm that cigarettes are doing to the population will loom larger in the minds of government officials. They will need to look with a more critical eye at the profit that the governmental tobacco monopoly is generating. This is not pure profit -- there is surely a "cost" associated with the 1.2 million deaths annually due to tobacco use.

Diatbet Successful in Promoting Weight Loss Based on Wagering

There are a number of effective ways to provide incentives for patients to improve their health. One way, frowned upon by some, is to reward patients in a way that they value for compliance or good health outcomes (see: A Lottery to Improve Patient Adherence to Warfarin Therapy; Financial Incentives for the Pursuit of Wellness; Possible Impact on the Clinical Labs). Spurred on by the idea of competitive dieting highlighted by the TV show Biggest Looser, similar programs have succeeded at the state level (see: Statewide Weight-Loss Competitions Achieve Record of Success). Dietbetting is the general name for social dieting communities based on wagering (see: Are social dieting communities a threat to health club, nutrition industries?). Here are more details about the phenomenon from a recent article:

DietBetter has developed a new way to lose weight called Social Dieting.“The Transformer” is a new dietbetting game where players have six months to lose ten percent of their starting weight, with money on the line. Players all bet into the pot at the beginning and win money as they reach their weight-loss goals. DietBetter, a company pioneering a new social approach to weight loss, recently released its new game, The Transformer, where players commit to lose ten percent of their starting weight in six months, with money on the line. Just in time for January, The Transformer gives players tangible motivation for sticking to their New Years’ resolutions in the form of monthly cash prizes as well as a final jackpot at the end. There are also weekly consistency prizes for players who weigh-in regularly....Financial incentives have been shown to help people lose weight and keep it off. When participants in a recent Mayo Clinic study were offered a chance to win $20 a month, 62 percent completed the challenge, dropping an average of nine pounds. Without financial incentives, only 26 percent followed through, and lost just two pounds on average. DietBet’s initial four-week game, The Kickstarter, has been similarly successful....“Dietbetting is a promising new approach to the treatment of obesity,” said Dr. Tricia Leahey, a professor at Brown Medical School’s Weight Control and Diabetes Research Center. “Putting money on the line boosts commitment and increases the chances of weight loss success.” Dr. Leahey presented a study of DietBet at The Obesity Society’s annual conference. She evaluated 25,000 participants and found the game successfully led to weight loss results of five percent on average in four weeks. In addition, her study showed that betting higher amounts of money and sharing on Facebook yielded better results.

For me, the most interesting part of all of this are the definitions and rules established by the company for the Dietbet contests that are listed on the web site (see: Dietbet 4 Rules). When there is money involved, some of the participants may want to hedge their bets. Here are a few of them that struck me as interesting:

• DietBet: A dietbet is a contest to lose 4% of your starting weight in a set amount of time. Players all bet money into the pot at the outset of the game. Winners split the pot.
• Organizer: An Organizer creates a dietbet and sets the game’s start date and stakes. The Organizer also determines whether the dietbet is invitation-only (Private) or open to the public (Open-Access). The Organizer normally invites friends to participate and may also join the game as a player.
• Pot: The pot is the sum of all bets in a dietbet. The pot, minus DietBet’s cut, is distributed to the winners after the game’s results are finalized by DietBet’s Referees.
• Official Weigh-Ins: Official weigh-ins are controlled by DietBet’s Referees and entail a photography-based weight-verification process set forth in the Rules. Only Official weigh-ins are used to determine winners.
• Airport Security Attire: Airport security attire is the dress code for official weigh-ins: light indoor clothing with no shoes, belt, hat, or outerwear. Pockets must be empty. No pocketbooks, watches, or other accessories.

For the ongoing November to May Transformer contest, the monthly bet for each participant was $25. There are 2,334 player in the contest with a total of $312,725 wagered. I have not been able to determine what percentage of the betting stakes the company keeps.

Here's a biosketch of the founder of Dietbet (Media Kit): 

DietBet's Founder & CEO Jamie Rosen dropped out of Harvard Business School to start his first internet business, Comet Systems, which he sold in 2004 for $33.5 million....Prior to Comet, Rosen was a toy inventor and today he has 10 pending and issued patents. In 2007, he sold several of his patents, covering location-based games, to Yahoo! He graduated from Harvard College in 1992 and is married with three children. 

The Quest for Fully Transparent Medical Records and Greater Patient Engagement

I believe that all patients should have ready access to their medical records with only a few exceptions. One major exception is obvious: patients should not learn about a serious disease for the first time during their medical record review. Such total access is a logical step in empowering patients to take more ownership for their own health. When patients are able to review physicians' notes, I believe that the notes will become shorter and more accurate. It will also suppress the use of repetitive "templated" entries in hospital EHRs (see: Distrust of "Templated" Physician Notes in EHRs; Implications for the Future; Three Ways to Document a Physician/Patient Visit in an EMR). A recent article by Walker, Darer, Elmore, and Delbanco in the NEJM discussed the path to "transparent medical records" (see: The Road toward Fully Transparent Medical Records). Here's a short excerpt from it; link to and read the whole article if you are interested.

....[I]n 1996 the Health Insurance Portability and Accountability Act entitled virtually all patients to obtain their records on request. Today, we're on the verge of eliminating such requests by simply providing patients online access. Thanks in part to federal financial incentives, electronic medical records are becoming the rule, accompanied increasingly by password-protected portals that offer patients laboratory, radiology, and pathology results and secure communication with their clinicians by e-mail. One central component of the records, the notes composed by clinicians, has remained largely hidden from patients. But now OpenNotes...is exploring the effects of providing access to these notes. Beginning in 2010, at Beth Israel Deaconess Medical Center..., Geisinger Health System ..., and Harborview Medical Center..., more than 100 primary care doctors volunteered to invite 20,000 of their patients to read their notes securely online. Although only a small minority of these doctors' patients used the portals, the initial findings were striking. At the end of a year, four of five patients had read the notes, and among those who responded to a survey, large majorities reported having better recall and understanding of their care plans and feeling more in control of their health care. Moreover, two thirds of patients who were taking medications reported improved adherence. Doctors reported little effect on their work lives and were surprised by how few patients appeared troubled by what they read. Although the notes were not formally evaluated, the majority of doctors reported not modifying their tone or content. A minority, however, reported changing the way they addressed four potentially charged topics: cancer, mental health, substance abuse, and obesity. After the first year, 99% of the patients surveyed wanted “open notes” to continue, 85% of the patients indicated that ready access would be important for their future choice of a provider or system, and no doctors chose to discontinue the practice. Despite limitations in the sample, the findings persuaded our three institutions to implement open notes broadly. 

In its web site, OpenNotes is described as a new standard of care. I don't believe that this is an exaggeration. Given that HIPAA in 1996 granted patients full access to their medical records, any further discussion of whether this is a good policy is largely moot. Here is a quote from my blog note of more than three years ago on this topic (see: Should Patients Be "Allowed" to Read Their Medical Records?):

[L]et me dismiss the idea that there is much room for debate about whether patients should be allowed to review their own medical records. HIPAA gave them the right to read, and even amend, these records years ago. Whether this is a good idea is being addressed in an ongoing study (see: Should Patients Read the Doctor’s Notes?). Regardless of whether it's a good idea, I don't think that the law will be reversed on the basis of one or more current studies. 

So now we have the results of a major OpenNotes study: patients very much liked access to physician notes and the felt more in control of their care, not an unexpected outcome. As a result of their engagement, they were more compliant with  prescribed drugs. The question before us now is not whether we make our electronic records available but how we make them more accessible. The obvious answer for hospitals is to give patients electronic tablets, if they do no come with their own, and then provide a unique ID and password for access to their personal records while hospitalized (see: Docs Prescribe Tablets For Better EHR Access).

Update on 23andMe; Time for a Review of FDA Definition of Medical Devices

In a note on November 29, 2013, I discussed how the FDA was clamping down on the consumer-oriented genomic testing site called 23andMe (see: The Dispute between the FDA and 23andMe; What's Really Going On?). Here's how  the company has decided to respond (see: Genetic Tester to Stop Providing Data on Health Risks):

The company will continue to take orders for new tests but will provide only ancestry information and raw data, without interpretations of the health implications. It said it might resume providing health data if it receives regulatory approval.

Here's an excerpt from an email sent to me personally on December 6, 2013, as a previous customer:

If you are a customer whose kit was purchased before November 22, 2013, your 23andMe experience will not change. You will be able to access both ancestry and health-related information as you always have. 23andMe has complied with the FDA's directive and stopped offering new consumers access to health-related genetic results while the company moves forward with the agency's regulatory review processes....We stand behind the data we have generated for customers. Our lab partner adheres to strict quality standards that are part of the Clinical Laboratory Improvement Amendments of 1988 - known as CLIA. These are the same standards used in the majority of other health and disease-related tests. 

In my blog note, I suggested that the company should redefine its services in order not to fall under the FDA definition of a medical device. I also suggested that it put more warning labels on its reports. Ezra Klein provides some other ideas in Bloomberg View (see: 23andMe Challenges a Creaky Regulatory State)

...[T]here’s a benefit derived from upstarts such as 23andMe bristling at creaky, old rules: They force a re-examination of laws that are, sometimes, genuinely outdated.“The legal question is pretty simple,” said Daniel Carpenter, author of “Reputation and Power: Organizational Image and Pharmaceutical Regulation at the FDA.” The definition of a device under the Federal Food, Drug and Cosmetics Act, Carpenter said, “is anything intended for the use or diagnosis of a disease or other conditions.”But the FFDC was passed in 1938. The section on medical devices was updated in 1976. The personal genetic test ...didn’t exist when the regulations were written. The short-term plan for 23andMe is a traditional pay-for-product model in which consumers hand 23andMe $99 to test their saliva and get a genetic report. But the long-term play is more interesting: 23andMe wants to aggregate the genetic information of millions of individuals, then mine that data to make medical connections, find disease markers and discover treatments at a faster rate than would be possible using traditional techniques. It’s an experiment in big-data genetics. Consequently, the value of the product now...says very little about how effective and valuable it might be in 20 years.

In the FDA’s letter to 23andMe, it cites potential harms from genetic testing; all are bank shots. After all, swabbing your saliva carries very little risk. So the FDA focuses instead on the possibility that a test will lead consumers to do something else that actually harms them. Consider, the FDA suggests, a 23andMe test that reports a false positive for a cancer gene: “It could lead a patient to undergo prophylactic surgery, chemoprevention, intensive screening, or other morbidity-inducing actions, while a false negative could result in a failure to recognize an actual risk that may exist.”Don Taylor, a genomics researcher at Duke University, delivers the obvious rebuttal: “Something has to happen in between that readout and the mastectomy,” he said. “There needs, for instance, to be a surgeon there.”The risk posed by 23andMe is closer to that posed by WebMD.com or fortune tellers than to the risk of having your health damaged by an X-ray machine. The danger isn’t that a genetic test will harm you directly but that you will act rashly on the information it provides. But is preventing patients from making bad decisions the FDA’s mandate? To Taylor, this is a “new technology bumping into an old regulatory approach.” The FDA is treating 23andMe as a medical device instead of as information.

I agree with Klein's arguments and ideas. First of all, it does not make sense to me for the FDA definition of medical device to encompass medical information. This definition dates back to 1938 with a revision in 1976. It's  out of step with modern genomics and the increasing importance of "big data." The FDA and other critics of 23andMe conveniently forget that physicians are interposed between data provided by 23andMe and, say, the performance of a mastectomy. In a similar way, the agency is blocking approval of digital pathology technology for primary diagnosis, forgetting that there is a pathologist interposed between the image of a biopsy and its interpretation.

One final point. There is still the possibility of false negatives with 23andMe reporting. This could result in a false sense of security about, say, the risk of a woman developing breast cancer if she is not aware of the limitations of this testing. Therefore, I will repeat my suggestion in my note of November 29, about the need for more rigorous warnings about consumers taking some action on the basis of 23andMe test results before consulting a physician.

New Reference Lab, AION, Specializing in Age Management Diagnostics

Almost eight years ago, I posted a note on the tight link between longevity medicine and lab testing (see: Anti-Aging, Longevity Medicine, and Lab Testing). The two go hand-in-glove. The tests are used, in part, to determine the biologic age of the patient and then various regimens and remedies are used to theoretically slow down the aging process. Here's a paragraph from that note:

Just to frame the issue and get your attention, annual revenue from the anti-aging industry is estimated to be $56B  -- this includes products such as anti-aging cream and botox injections. Need to find an anti-aging physician?  No problem. Here is the link to the home page of the American Academy of Anti-Aging Medicine (A4M). It's not too late to attend the 14th Annual International Congress on Anti-Aging Medicine.

When I wrote this note, I was not surprised that there was a market for services that emphasize youth in U.S. society. However, I had not thought about longevity medicine afterwards until I came across another article indicating that PAML had launched a lab focused on age management medicine diagnostics (see: AION Laboratories to Deliver Age Management Diagnostics). Here is an excerpt from it:

AION Laboratories, specializing solely in Age Management Medicine diagnostics, has been established to provide a full spectrum of laboratory testing to age management physicians and clinics across the country, said Francisco R. Velàzquez, M.D.,...CEO of PAML...and AION Laboratories. AION’s aging-related tests allow physicians to use a single requisition to obtain a thorough laboratory assessment of each patient. AION utilizes robust diagnostic technology to detect risk factors and biomarkers associated with aging. The purpose is to provide answers based in science and to support physicians whose goal is to enhance both patient health and physical performance well beyond statistical expectations....The laboratory, based in Spokane, Washington, utilizes cutting-edge immunoassays, tandem mass spectrometry and DNA analysis. AION has also established partnerships with highly specialized laboratories for propriety tests that complement our services.Test panels include baseline assessments for males and females, thyroid, lipid, expanded lipid, chemistry, cardiovascular risk assessment, comprehensive cardiovascular, female and male hormone, expanded hormone for males and females, menopause, inflammatory, diabetes/metabolic testing and genetic testing.

Probably the most important addition to the test menu in recent years for age/longevity medicine has been genomic testing (see: Length of DNA Strands Can Predict Life Expectancy). I have the impression that this specialty area has been flying below the lab radar for a long time but PAML/AION now seems prepared to capitalize on it. However, I do have one question. Why does PAML need to develop a new laboratory to provide the necessary lab testing for practitioners in the area. I am sure that PAML must have provided most or all of these tests prior to the launch of the new lab. I think part of the answer to this question is provided in the AION Labs web site in the "about AION" section. Here is a cut-and-paste from it (see: Available Tests):

The wide-ranging panels available from AION enable us to be a single-source laboratory partner to discriminating practitioners....Our test menu—characterizing a full spectrum of risk factors and biomarkers for age-related conditions—includes thyroid, lipid, chemistry, cardiovascular, hormone, menopause, inflammatory, metabolic, and genetic testing. A growing population of men and women age 35 and older is clearly becoming more determined to prolong a healthy lifespan. By detecting the underlying causes of aging in individual cases, AION supports physicians creating personalized treatment programs designed to restore and rebalance bodies through middle age and beyond.

Clearly the longevity medicine practitioners are looking for a "single-source" lab to meet their diagnostic needs. I am sure that this will be lucrative but is there the possibility that chasing this market will tarnish the reputation of PAML? Probably not.

How Do ACOs Differ from HMOs; What Is Their Achilles Heel?

I have been relatively unenthusiastic about ACOs, thinking that they are merely reconstituted HMOs (see: The Emerging Role of ACOs; How to Define and Reduce Unnecessary Services; Hospital Executives Search for the Formula for an Accountable Care Organization; ACOs Won't Work According to Clayton Christensen in the WSJ). I came across a recent article that discusses the same idea and suggests that both are highly dependent on cherry-picking healthy patients in order to succeed (see: Are ACOs Really Different from HMOs?), Below is an excerpt from this latter article:

Accountable care organizations are a "fad" and "not very different from the HMO model… [with] a few bells and whistles, but otherwise it's the same old incentive to do as little as possible and find the healthiest patients you can," says [Richard Amerling, MD], a director of the Association of American Physicians and Surgeons....Accountable care organizations (ACO) aim to completely revamp how healthcare is delivered in the United States, promising better quality and lower costs. But physicians who have heard these promises before are wondering if ACOs are just the new version of HMOs, the same lofty concept dressed up in a new way....HMOs also were touted as the revolutionary way to save healthcare in America, Amerling says. In that model, the physician served as a gatekeeper for the insurance companies to control access to high-level care, tests, and hospitalizations. Under a capitation arrangement, the physician was paid a set amount per patient to coordinate care, which Amerling says provided a strong incentive to restrict patient access to care. In addition, capitation provided a bonus to the physician if total spending on patients was kept below a certain amount. The plan worked well if the physician's patients were overwhelmingly healthy, which encouraged cherry picking of the most profitable patients. But eventually the very sick had to receive care, and that threw the whole system off....

The differences between the HMO and ACO models are purely cosmetic, he says. ACOs also will have strong incentives to cherry-pick the healthiest patients and limit access to expensive medical care, and eventually that strategy will fall apart just as it did with HMOs, he says.....There are a few bells and whistles, but otherwise it's the same old incentive to do as little as possible and find the healthiest patients you can. [H]is concerns are borne out by the experience of the Pioneer ACOs that recently reported their results. All of the 32 health systems in the Pioneer ACO program reported improved scores on quality measures such as cancer screenings and controlling blood pressure, but only 18 were able to lower costs for the Medicare patients they treated. Two hospitals reported losing money on the ACO program and seven notified CMS that they will switch to a different ACO because of the monetary strain. Two said they will dump the ACO model and find another approach with less financial risk.

The notion that ACOs are little different than HMOs has been raised in other articles. Here, however, are some quotes from one that takes the contrary point of view and highlights differences between the two (see: Why ACOs Are not HMOs and Other Important Questions). Here are two differences cited in this article:

The ACO is not a very new concept. It was a term that was coined by Elliott Fisher from Dartmouth Medical School, who is the director of Center for Health Policy and Clinical Practice. I hate to use the word HMO, but in a way, it’s almost like an HMO. It’s not really an HMO because it is actually a provider-led organization, not an insurance-led one. In an ACO, the participants agree to be accountable for a population of patients and have agreed to share, not just in terms care delivery, but also in terms of risk sharing: cost and utilization of services. The ACO attempts to increase access, promote higher quality, and reduce costs. And one hopes because of the organization’s direct responsibility its population of care, that it would achieve success in all three of those domains.

 I think one of the key differences here is that HMOs have been putting up walls in terms of patient options, whereas ACOs are breaking down those walls. One of the major tenets of the Medicare program and the Medicare pilot is that the patient would not be forced to choose networks of doctors. They are supposed to have a choice.

So HMOs were insurance-led rather than a provider-led with physicians acting as the gatekeepers in the former model. However and relating to Amerling's point in the excerpt above, HMOs and ACOs share the need to reduce the delivery of services to patients to reduce costs. While this is theoretically possible by becoming more efficient, I think that only the most innovative provider organizations are clever enough to accomplish this goal. It's far easier to merely cherry-pick the patients who enroll in the ACOs and thus skew the covered population to the healthiest. As Amerling also emphasizes, only 18 of the 32 "pioneer" ACOs were able to accomplish this goal for the Medicare patients they treated.