Many Diabetes Patients Conclude that the Treatment is as bad as their Disease

The current standard for evaluating diabetes treatments is typically the net impact a treatment has on a patient's hemoglobin A1c, but new research published in the October 2007 edition of Diabetes Care ("Patient Perceptions of Quality of Life With Diabetes-Related Complications and Treatments", Elbert S. Huang, Sydney E.S. Brown, Bernard G. Ewigman, Edward C. Foley, and David O. Meltzer, Diabetes Care 2007 30: 2478-2483.) suggests using reduction in hemoglobin A1c alone is really insufficient to evaluate how effective new treatments and treatment protocols are.

Researchers from the University of Chicago have finally asked a question that clinicians have for too long ignored: treatment impacts perceived quality of life, too, and that impacts patient compliance. In essence, the researchers found that in many cases, patients believed the burden of managing their condition was as bad as (or worse than) some long-term diabetes complications. Thus, a major explanation for noncompliance: the perceived trade-off is really no better or worse than what patients are being asked to do on a daily basis in order to hopefully avoid long-term complications.

Dr. Elbert Huang, M.D. and and his colleagues conducted hour-long face-to-face interviews with a multi-ethnic sample of 701 adult, type 2 diabetes patients attending Chicago area clinics between May 2004 and May 2006. Specifically, they asked patients to rank the benefits of various treatments and the daily quality-of-life burdens of diabetes-associated complications.

Patients were asked to express their preferences in a series of trade-offs. The surveyors asked, for example: would you rather have 6 years of life in perfect health, or 10 years with an amputation"? This reflects the way in which patients actually evaluate their options. Unfortunately, a separate study revealed that:

1. Diabetes medications have been approved without requiring proof of reducing the risk of complications associated with diabetes, such as heart attack, stroke, amputation, blindness and kidney dialysis.
2. The majority of diabetes trials focus on the ability of medications to reduce blood sugar, not on outcomes that matter to patients.
3. Diabetes medications may reduce the risk of complications, but we do not know this with confidence.
4. The focus should shift from getting new drugs to market to testing the effect of diabetes medications against outcomes important to patients.

Both of these are very important findings because they mirror what many patients have long claimed: that the burden of disease management has an adverse impact on perceived quality of life, and that in some cases, that avoidance of complications comes at the expense, inconvenience and discomfort of constant therapeutic vigilance, particularly multiple daily insulin injections, and that the regimen's outcome may not always be sufficient to justify the effort.

"The people who care for patients with a chronic disease like diabetes think about that disease and about preventing long-term complications," said study author Dr. Huang. "The people who have a chronic disease think about their immediate lives, which includes the day-to-day costs and inconvenience of a multi-drug regimen. The consequences are often poor compliance, which means long-term complications, which will then require more medications."

According to the press, despite growing reliance on complex multi-drug regimens, large proportions of patients with type 2 diabetes continue to have poorly controlled glucose (20%), blood pressure (33%) and cholesterol (40%).

Many patients found both complications and treatment onerous. Between 12 and 50 percent were willing to give up 8 of 10 years of life in perfect health to avoid life with complications, the authors found, while between 10 and 18 percent of patients were willing to give up 8 of 10 years of healthy life to avoid life with treatments.

"This tells us that we need to find better, more convenient ways to treat chronic illness," Huang said. "It is hard to convince some patients to invest their time and effort now in rigorous adherence to a complex regimen with no immediate reward, just the promise of better health years from now," Huang said.

The University of Chicago researchers aren't the first ones to reach this conclusion, only the most recent ones. Almost a decade ago, Deb Butterfield (author of "Showdown with Diabetes") addressed this issue in her essay "The Diabetes Control and Complications Trial: What Did It Really Tell Us?".

She concluded that "intensive therapy is a lofty theory that fails abysmally in practice." She noted that the two most significant points of failure are (1) human behavior, and (2) severe hypoglycemia. She concluded that perhaps the best test of the NIDDK's "behavioral theories and strategies" would be to follow 1,441 non-diabetic people over a period of 10 years as they try to comply with the regimen of injections, restrictions and uncertainty that is expected of the diabetic population. The conclusion would, she argued, likely be that "the regimen itself is unreasonable and that the co-morbidities of depression, eating disorders and family dysfunction are, after all, only human." Deb's writing in 1998 was considered radical thought back then, yet ironically, has been proven with this University of Chicago study.

The bigger question is what clinicians will do with these findings? Medical dogma is incredibly slow to change, and it may take additional research proving this point before anyone accepts these findings. In the meantime, patient education is critical, but so too is patient willingness to comply, and that's an area many doctors and diabetes educators fail to incorporate into their clinical practice, and they ponder their approach and wonder why. Perhaps its worth it for doctors to consider adding some psychology CME credits to their continuing medical education?

The Business of Diabetes: Recent News

Recently, the European Association for the Study of Diabetes (EASD) concluded its meeting in Amsterdam (for some notes from the conference, see the Close Concerns postings from 9/18 , 9/21, and 9/24 as well as Kelly Close's revolutionhealth.com blogs from 9/18 and 9/21 for more details), and while a fair amount of the news seemed to be more repetition or updates to presentations made at this year's ADA Scientific Sessions held this summer, there were some noteworthy news items.

Most notable was not related specifically to the EASD, but it was announced just before the EASD that Dr. Robert J. Heine was joining Eli Lilly and Company (see Lilly's press release here for more on that). Dr. Heine is currently professor of diabetology in the Department of Endocrinology and director of the Diabetes Centre at the VU (Vrije Universiteit) University Medical Center in Amsterdam, Netherlands. In addition to involvement in numerous research projects, Dr. Heine holds various positions within European diabetes organizations and associations, as well as a member of the ADA Expert Committee on guidelines for the treatment of hyperglycemia in type 2 diabetes.

Dr. Heine's primary research interests is the epidemiology and pathophysiology of type 2 diabetes. This does not make him the most obvious choice for his new role, as Lilly's type 2 business actually remains fairly healthy (the Byetta franchise which is exclusively for the type 2 audience remains very healthy, although profits are shared with partner Amylin Pharmaceuticals, Inc.) while Lilly's insulin business aimed largely at the type 1 audience is the business that's in terrible shape. In fact, since Lilly introduced Humalog in 1996, the company's market share in insulin has plunged from 82% of the market back in 1995 (and as recently as 2000) to just 43% in 2006 according to IMS Health (Lilly still controls 50% of the insulin analog market, however). What's more, there are no insulins in late stage development except for an inhalable insulin similar to Exubera (and that's looking like a bust, although supporters claim the size of the bong its inhaled through is to blame, I think its the lack of using a standardized dosage that doomed Exubera). Dr. Heine cannot fix a lack of investment made over a decade ago, but he can support studies that demonstrate superiority of Lilly insulin products over rivals, possibly even ones like the Barbara Davis Diabetes Center study that showed it was feasible for patients to mix Humalog and Lantus in the same syringe without any adverse impact on glycemic control.

As I elucidated in my January 18, 2005 Open Letter to Lilly CEO Sidney Taurel, it will take more than some fancy pens to turn around Lilly's insulin franchise. Although Dr. Heine was not necessarily the best choice, he certainly is a strong leader with a proven track record in the field of treatment. The fact remains that Lilly badly needs someone to turn the business around from a strategic standpoint, and having an articulate, powerful leader heading the endocrinology business at Lilly can go a long way towards getting research dollars that, in recent decades, were invested into treatments for unrelated conditions. These include such ailments as depression (Prozac, Cymbalta) and schizophrenia (Zyprexa) just to name a few blockbusters, as well as erectile dysfunction (Cialis), while the diabetes business has been forced to rely almost exclusively on outside partnerships for the past decade. Dr. Heine may bring a fresh perspective and new leadership to the Indianapolis-based company that has strayed from its roots as the first mass-producer of insulin made commercially available in North America.

Unfortunately, when it comes to insulin, today, Lilly is a one-trick pony, offering no long-acting insulin whatsoever since removing Ultralente from the market in 2005. Basal insulin is often promoted as a treatment for type 2 diabetes, but as Rury Holman of Oxford University presented at the EASD, patients with type 2 diabetes are less likely to reach target blood sugar levels on the basal insulin alone than when on rapid-acting insulin products to cover meals, although truthfully, the differences were not really huge with either. This really is like proving the obvious, yet for some reason, most type 2 patients who begin insulin therapy start with basal insulin only. Still, in this study, involving 708 type 2 patients who had poor control of their disease despite taking two oral diabetes drugs, found that while all the insulins helped, only 8% of patients achieved target HbA1c below 6.5% with a basal insulin alone. We shouldn't be too surprised that the study was sponsored by Novo Nordisk (although this study is scheduled to continue until 2009), a company that relies on revenues from insulin for such a large percentage of its profits.

As Mads Krogsgaard Thomsen, Novo Nordisk's chief scientific officer so appropriately noted, "It [the 3-year study comparing three types of insulin in type 2 diabetes patients] shows you need a portfolio of insulins you can combine and intensify". One is usually not sufficient. Perhaps Dr. Heine should take note, as Lilly risks losing more managed care providers who seek to minimize the number of suppliers to their drug formularies. Unfortunately, as I noted before, drug development takes a decade (sometimes more), so Lilly may need to expand its partnerships if it wants to stop the slide in its insulin market share. However, it is hopeful that Dr. Heine will take take this into consideration.

Beyond this little tidbit, Lilly's new tagline, "We Take Diabetes Personally" was also revealed. While having a good tagline is not a bad thing, I don't think that will be sufficient to stop Lilly's slide in prescriptions for insulin, only doing the hard work and offering a complete product portfolio will accomplish that.

In other Business of Diabetes news, archrival Novo Nordisk recently announced some management re-shuffling which will take place January 1, 2008. Most notably, Martin Soeters, who is currently the Senior Vice President of Novo Nordisk North America and President of Novo Nordisk Inc. (the company's U.S. affiliate) is being moved to take up the position as Senior Vice President of the Europe region. Mr. Soeters was a hard-charging (some would go so far as to call him downright pompous) executive who reigned over Novo Nordisk North America and Novo Nordisk, Inc. during a period of the company's most dramatic growth. After all, this is the man who said publicly that there is no need for regular human insulin because analogs are so superior. To his credit, during his tenure, Novo Nordisk hired U.S. salespeople aggressively to call on doctors pushing Novo Nordisk insulins and pen devices, and the company worked aggressively with managed care providers and pharmacy benefit managers (PBMs) to secure "preferred" status on many big insurers' drug formularies, something rival Lilly failed to do rather than protecting a product line that had been filling the company's coffers since 1923. Novo surpassed Lilly as the market share leader back in 2005. Mr. Jerzy Gruhn will assume the roles currently held by Mr. Soeters.

Aside from that, an insulin startup (and we rarely see many of those, unlike other therapeutics), Biodel, Inc., which went public in May 2007 (see my posts here, here and here for details) promoted continued success in its initial research. Their research did not appear to offer much beyond that which was presented at the ADA in Chicago, but clearly, company management is building awareness on a worldwide basis for the company's VIAject(TM) product, which works more (a few minutes) rapidly than Humalog, Novolog or Apidra, yet is structurally identical to regular human insulin with a few additives that improve the insulin's absorption, distribution, metabolism, and excretion (known as "ADME" in pharmaceutical industry lingo) via the subcutaneous tissue delivery. That improves its peak speed and duration of activity. And unless anyone forgets, there have been additives in our insulin since NPH was first introduced in 1946, so lets not complain about something that speeds it up a little. So far, it appears to offer a few benefits over non-insulin analogs, but those only serve to reduce blood glucose and may have unintended long-term impact, as patients now taking these products are the the long-term clinical trial subjects (do you recall enrolling in a clinical trial?). Also, Biodel announced they are now expanding VIAject's pivotal Phase III trials (which are already underway in the U.S., although I do not believe the studies are blinded) into Europe for type 1 and type 2 patients to support the company's planned European registration of VIAject according to Chairman and CEO Dr. Solomon S. Steiner. While Biodel may ultimately choose to or even need to partner with a larger company to manufacture its product, it doesn't look like Biodel will do much for Lilly's missing therapeutic: a long-acting insulin. Meanwhile, assuming the Phase III clinical trials now underway are successful, it looks like Biodel will be able to profit handsomely (much as Amylin was able to do with its Lilly partnership co-marketing Symlin and Byetta).

Smart Insulin Nanostructures Pass Feasibility Test, Study Reports

As my readers may know, I have followed SmartCells, Inc. since its inception in 2003, and have followed the key milestones because I believe the company's Smart Insulin concept is light years ahead of anything now in development from the insulin cartel dominated by Novo Nordisk, Eli Lilly and Company, and Sanofi Aventis. Essentially, the company's form of insulin, if it continues on its thus-far successful path, will release insulin molecules in direct proportion to a patient’s blood glucose levels, eliminating the nasty side-effect of hypo or hyperglycemia caused by all current forms of insulin. The NIH/NIDDK is perhaps one of the company’s biggest "investors". The biggest benefit, however, is that Smart Insulin would eliminate hypoglycemia, and significantly reduce the need for frequent testing. As you might imagine, the concept is great, but it could kill most forms of insulin now on the market, command a huge premium in price, and would effectively kill a big piece of the home diagnostics business, so some pharmaceutical and healthcare companies would like to see the product die. SmartCells has secured venture capital and funding from the National Institutes of Health, but skeptics remain.

Much of the skepticism is perpetuated by the insulin cartel, in part, because their drug pipelines for improved insulin are pretty barren -- even Novo has relatively little in insulin development beyond its current portfolio of "modern insulins" (a euphemism for insulin analogs), except another version of Levemir that supposedly does not encourage weight gain which is aimed mainly at the type 2 market. Lilly has nothing in its pipeline other than inhalable insulin, and Sanofi Aventis faces continued criticism from investors over the lack of disclosure on drugs in development. We do know, however, that insulin and diabetes care is a very tiny piece of the company's total business.

As I reported following my conversation with SmartCells CEO, Todd Zion, the outlook for Smart Insulin appears quite positive. It appears there is more good news: on Tuesday, September 18, 2007, Biomedical engineers at The University of Texas School of Health Information Sciences at Houston announced pre-clinical test results in the September issue of the International Journal of Nanomedicine demonstrating the feasibility of a smart particle insulin release system that detects spikes in glucose or blood sugar levels and releases insulin to counteract them.

The study, "Glucose-sensing pulmonary delivery of human insulin to the systemic circulation of rats," was conducted in the laboratory of Ananth V. Annapragada, Ph.D., an associate professor at the UT School of Health Information Sciences. Research assistant Efstathios Karathanasis was lead author and postdoctoral fellow Rohan C. Bhavane was a contributor on the article. The full press release can be seen here.

Some more details on the underlying mechanism were also revealed. I couldn't tell whether it was the exact same mechanism used in the Smart Insulin concept (you can check out their U.S. patent application, "Stimuli-responsive systems for controlled drug delivery" here for details), but the validity of the concept has been proven, which surely solidifies SmartCells concept now being developed.


The University of Texas researchers tested a smart particle system consisting of a blood sugar sensing protein named concanavalin A (Con A) and bundles of tiny fat bubbles called liposomes that are loaded with insulin. "Con A binds insulin-containing liposomes that are coated with sugars, to each other, to form the inhaled particles," Annapragada said. "When blood sugar becomes present, the Con A releases the particles to bind independently to the sugars. The released particles then release their insulin."

One caveat: this study was conducted on rats with diabetes. As we are well aware, rodent models are poor replicas of more complex mammals, but what has been examined is proof of concept, not human clinical trials. Those will need to follow, but this indeed validates the idea now under development at SmartCells, Inc.

Dangerous Prescription: Renewing the FDA's Chief Source of Funding

The Food and Drug Administration (FDA) has become too cozy with the industry it regulates, and it looks like that problem is likely to get worse. Right now, Congressional lawmakers are pushing to reach a final agreement this week on legislation that would supposedly help fund the FDA for the next 5 years (by having much of the Agency's budget being funded by the companies it is supposed to be regulating).

The current law expires Sept. 30. Last week FDA Commissioner Andrew von Eschenbach said the FDA would have to start the process of sending out so-called reduction-in-force notices to up to 2,000 employees if an agreement on new FDA legislation isn't reached by Sept. 21. The user fees help fund the FDA along with some TINY annual appropriations from Congress. Put another way, if the user-fee legislation isn't renewed by Sept. 30, the FDA would eventually have to lay off up to 20% of its work force because the Agency cannot afford to pay them with its appropriations from Congress.

Critics of the 1992 Prescription Drug User Fee Act argue that industry funding of the drug review and approval process gives pharmaceutical companies, and their lobbying arm, PhRMA, too much influence.

The Boston Globe argues that in effect, the user fee act put the FDA on the payroll of the industry it regulates. It reports that last year, those fees came to about $300 million, which the companies recoup many times over by getting their drugs to market faster.

But while it's a small investment for drug companies, it's a lot of money for the Agency, and it has drastically changed the way it operates -- creating a disproportionate emphasis on approving brand-name drugs in a hurry. Consequently, the part of the agency that reviews new drugs gets more than half its money from user fees, and it has grown very rapidly. Meanwhile, the parts that monitor safety, ensure manufacturing standards, and check ads for accuracy have languished or even shrunk.

According to Dr. Sidney Wolfe, M.D., who has been the Director of Public Citizen's Health Research Group since its founding in 1971, the pharmaceutical industry's influence gets exerted in a number of different ways. The most notable one, starting 10 years ago [with the Prescription Drug User Fee Act (PDUFA)], the influence was exerted by their directly funding, paying cash right up front, for FDA review. So in many ways, the FDA started looking upon the industry as their client, instead of the public and the public health, which really should be considered the FDA's client.

Another way in which the industry's influence has been allowed to grow considerably has been with the absence of Congressional oversight. Up until 12 years ago, whenever the FDA would make a mistake -- such as the series of mistakes they've made in the late 1990s -- there would be a Congressional hearing. They would have to explain to the legislative branch of the government what went wrong. They would be -- properly, and in the best public health sense -- on the defensive to try and explain what went wrong.

But no one is there in the Congress [now]. There have been essentially 1 or 2 days of oversight hearings in 12 years, as opposed to maybe the previous 12 years with dozens and dozens of oversights. So they're getting away with no Congressional oversight.

Dr. Wolfe argues that the culture at the FDA has become, "Please the industry. Avoid conflict. Look upon our role as getting out as many drugs as possible."

To see more of the PBS Frontline story on this subject, see here for details. John Kelly, the spokesman for PhRMA, the industry's lobbying organization, had a different perspective, but the point is that the user fee structure means the FDA is no longer on the U.S. taxpayer's payroll, and as a result, there have been fundamental shifts in the way the Agency operates.

If we as a society complain about the FDA's handling of type 2 diabetes drug Avandia, we need to give serious consideration to how we fund the Food and Drug Administration. Unfortunately, Congress is borrowing heavily from China and other countries to pay for an unsustainable war in Iraq, and this President has vowed to veto spending on anything other than what he believes is a priority, and that does not include the FDA. The FDA user fees were created in the early 1990's as temporary means to fund the Agency, but has instead become the primary means of funding the government Agency who is supposed to be looking out for our safety. Our lawmakers should only be considering proposals to extend current user fees by a short time, not making it a permanent source of funding.

Congress Presses for Agreement On Funding, More Clout for FDA
By Jennifer Corbett Dooren, The Wall Street Journal
September 19, 2007 11:15 a.m.

WASHINGTON -- Congressional lawmakers are pushing to reach final agreement this week on legislation that would help fund the Food and Drug Administration for the next five years and give the agency new powers to regulate new drugs after they go on the market.

Earlier this year, the House and Senate each approved separate bills that would reauthorize programs allowing the FDA to charge pharmaceutical and medical device user fees.

Current law expires Sept. 30. Last week FDA Commissioner Andrew von Eschenbach said the FDA would have to start the process of sending out so-called reduction-in-force notices to up to 2,000 employees if an agreement on new FDA legislation isn't reached by Sept. 21. The user fees help fund the FDA along with annual appropriations from Congress. If the user-fee legislation isn't renewed by Sept. 30, the FDA would eventually have to lay off up to 20% of its work force.

Earlier this month, lawmakers were considering a proposal to extend current user fees by three months, but Sen. Mike Enzi (R., Wyo.) the ranking member on the Senate Health Education, Labor and Pensions Committee, opposed the plan, saying legislation needs to be passed before reduction-in-force notices go out. Although employees wouldn't be immediately laid off, Mr. Enzi said he was concerned the FDA would lose employees targeted for layoff to the private sector. He said it took 18 months for the FDA to become fully staffed the last time layoff notices went out even though the agency never actually had to cut its work force.

Each of the bills also contains provisions aimed at boosting drug safety by giving the FDA more power to require drug companies to conduct new studies of drugs already on the market, limiting distribution and ordering label changes if the agency deems them necessary.

The FDA's authority in those areas isn't clearly defined so the agency often has to negotiate with companies, using its leverage before it grants approval for a new drug with the indirect threat of its bully-pulpit power to get the concessions it seeks.

The FDA has faced bipartisan criticism over its handling of safety issues over drugs such as Merck & Co.'s withdrawn painkiller Vioxx and, more recently, GlaxoSmithKline PLC's diabetes drug Avandia. Both drugs were linked to an increase in heart attacks after they were approved.

While the House and Senate bill are broadly similar, they do contain differences that must be worked out, approved again by both chambers and sent to President Bush for his signature. Among the differences in the bills are the amount of fines that could be levied on drug and medical-device companies for failing to comply with FDA rules and different conflict-of-interest rules for outside medical experts who serve on FDA advisory committees.

The bills also give the FDA authority to require drugs entering the market to enter into a risk-mitigation plan for a certain time period to allow the agency to formally track safety problems that might come up after a drug reaches the market.

Since 1992, the FDA and drug and medical-device companies have negotiated user-fee agreements every 5 years. User fees fund part of the FDA's budget while Congress appropriates money to fund the rest. Traditionally, user fees were aimed at expediting the review of drugs and medical devices and the use of the money had largely been directed at pre-market review. Now a larger chunk of money would be used for post-market safety reviews.

The FDA had asked Congress for the authority to collect $393 million in funding from drug companies next year. However, the Senate bill would require drug companies to pay an additional $50 million and the House bill would require companies to pay an additional $225 million over 5 years.

Both the House and Senate bills would also authorize the FDA to collect about $287 million in fees over the next five years from medical-device companies. Such fees are collected, for example, when companies file applications seeking FDA approval of products.

Write to Jennifer Corbett Dooren at jennifer.corbett-dooren@dowjones.com

URL for this article:
http://online.wsj.com/article/SB119021320174932451.html

Pennsylvania's new chronic care group to focus on diabetes first

Back in April, I wrote about how Pennsylvania Governor (who was the mayor of Philly when I lived there) Ed Rendell planned to focus on caring for chronic diseases, including diabetes, as a cornerstone of his "Prescription for Pennsylvania" healthcare reform plan. When the governor announced the chronic care commission earlier this year, he reported about 78% of health care costs can be traced to about 20% of patients with chronic diseases.

This morning's Pittsburgh Post-Gazette has a story with more details on how the plan will impact diabetes care. A commission is expected to focus first on diabetes, then move on to other chronic conditions including depression, asthma and heart disease. As the paper notes, many experts have expressed concerns that the current U.S. health care system, which focuses almost exclusively on acute care, is not optimally organized to care for people with chronic diseases like diabetes. Payment systems, for example, generally do not provide incentives for health professionals to spend time with patients to help them manage their chronic conditions.

"We cannot reduce the occurrence and cost of chronic diseases without aggressively addressing prevention, detection and treatment in a comprehensive, pro-active way," he said. "Setting that up will be the job of this commission."

The commission is expected to deliver a plan by Dec. 31 recommending changes needed to implement a model for improving chronic care statewide. If the governor approves the plan, some changes could begin to be implemented next year. The 43-member panel includes officials from leading healthcare insurers, hospitals, unions and other groups, as well as six ex officio members who lead various Pennsylvania state agencies.

While prevention of those forms of diabetes that can actually be prevented is certainly an element that deserves attention, the reality is that type 1 diabetes (an autoimmune disease) cannot be prevented, yet many foolish public health approaches assume that everyone with diabetes has type 2, is obese and also suffers from co-morbidities including hypertension, and that simply taking a few extra steps each day will work wonders for everyone suffering from diabetes.

For example, New York City's plan makes these over-simplified assumptions, and has effectively alienated a potentially powerful ally in their effort, namely patients with type 1 and/or their caregivers (notably parents of children with type 1). For example, in their communications to all patients whose hemoglobin A1C is greater than 9 (including children with type 1 diabetes) talks almost exclusively about weight-loss and blood pressure control, in spite of no evidence that either is an issue in children with type 1 diabetes.

As a New York Times article from last year revealed that in 2006, California officials learned the hard way what parents of children who have type 1 think about such campaigns. The Times article explained:

To address the epidemic of obesity, the state ran a series of hard-hitting television advertisements that ridiculed junk food and showed sweet-faced preschoolers asking questions like "Can I have some fat?" or "Dad, can you buy me some diabetes?"

The advertisements were aimed at parents of children in danger of developing Type 2. But there was little response from that audience. Instead, parents of children with Type 1 barraged the state with e-mail messages and phone calls, furious that the ads had referred to diabetes without mentioning Type 2. The ads lumped all diabetics together, the parents said, implying that Type 1 diabetics were somehow to blame for their disease.

"We never anticipated this intensity of feeling about making the distinction," said Kris Perry, executive director of the state agency that produced the ads. "The responses were very emotional, coming from a place of people feeling really hurt."

Its still very early, and the Pennsylvania Commission has yet to formalize their plans. The good news is that Governor Rendell has stated very clearly that while prevention is important, it is only 1 piece of the puzzle, but that more needs to be done in order to manage care for patients who have the condition. Let's hope Pennsylvania learns from the mistakes California made in 2006. In the case of New York City's plan, its ironic that no status report has yet been issued on their plan, in spite of implementation over 1 year ago. The New York City Department of Health and Mental Hygiene stated publicly that their goal was to reducing hemoglobin A1C levels among already-diagnosed patients by 20%, but since no updates have been published, its seems fair to conclude that those lofty ambitions have not yet been met.

Stem Cell Pioneer to Join California Institute of Regenerative Medicine

In the past year, the news on stem cell research has been pretty limited. Due in part to the severe restrictions (which did not exist prior to President Bush's policies, even under Presidents Reagan or George H.W. Bush), and in part, due to the scandals coming from South Korea. But we have seen progress, most notably in the private sector, as South San Francisco-based Geron Corp. reported in late May that they had cultured pancreatic beta cells in vitro. But unlike previous efforts of culturing beta cells in vitro at labs in Sweden, Israel and elsewhere in the U.S., however, the Geron-cultured beta cells were actually responsive to changes in blood glucose levels, whereas prior efforts were not, therefore, this was an important breakthrough. But other news has been slower in coming.

California's Proposition 71 was supposed to usher in a wave of scientific discovery in the field, but repeated lawsuits filed by opponents who couldn't seem to take no for an answer in spite of an overwhelming majority of Californians supporting the bill caused unanticipated delays in research progress for the past few years. As a result, the California Institute of Regenerative Medicine ended up consuming time (the lawsuits challenging the proposition ultimately failed, BTW) fighting these challenges rather than doing scientific research. With those issues finally behind us, it seemed likely that news coming from California could start to emerge before long. Today's Los Angeles Times is reporting the first such development.

Specifically, Australian biologist Alan Trounson will aid California's $3-billion effort to find cures for diseases through human embryonic research. While its too soon to predict the impact of this development, it seems certain that having such a pioneer on staff will certainly aid the California Institute of Regenerative Medicine in terms of strategic direction, awarding grants and overall efforts in the field.

The full story follows below:

Stem cell pioneer to lead state's institute
By Mary Engel, Los Angeles Times Staff Writer
September 15, 2007

Australian biologist Alan Trounson will aid California's $3-billion effort to find cures for diseases through human embryonic research.

A pioneering Australian biologist who was among the first scientists to grow human embryonic stem cells in a laboratory will lead California's $3-billion effort to translate such research into cures for diseases.

The unexpected announcement that Alan Trounson, 61, director of the Monash Immunology and Stem Cell Laboratories in Melbourne and a founder of the Australian Stem Cell Centre, would be the new president of the California Institute for Regenerative Medicine came during a teleconferenced meeting of the institute's oversight board Friday.

Robert Klein II, board chairman and driving force behind Proposition 71, which authorized creation of the institute, praised Trounson for his deep roots in the field, his experience in taking discoveries from the laboratory to the clinic and his "global vision."

Trounson will be paid $490,000, or if the state approves paying his moving expenses, $475,000, Klein said. Under the terms of his contract, he can work part time at a prorated salary for up to six months as he closes down his laboratory.

Trounson wants to start his new job as soon as he works out visa requirements, he said.

"This is a life-marker for my career," he said Friday by video hookup from Melbourne. "I just want to get on with the job."

Trounson's appointment comes just as the almost 3-year-old institute is set to shift into warp speed with an infusion of money and talent. Until now, it was running on borrowed money and a skeletal staff.

The state treasurer's office has set a Sept. 27 date for the sale of $250 million in general obligation bonds, the first installment of the billions of dollars for research approved by voters in 2004. The sale had been blocked by a lawsuit challenging the constitutionality of Proposition 71, officially known as the California Stem Cell Research and Cures Act, but in May, the California Supreme Court gave a final clearance to the research effort, declining to hear an appeal of two lower court rulings. That action cleared the way for the first bond sale.

Klein, chairman of the institute's oversight committee, wrote Proposition 71 in response to President Bush's August 2001 mandate that restricted federal funding to only a handful of human embryonic stem cell lines created before then, which happen to include those grown by Trounson's team. The restrictions were prompted by moral concerns about destruction of embryos during such research.

Embryonic stem cells are among the first cells to form after an egg is fertilized and exist for just a few days before giving rise to specialized cells. Their ability to become any type of tissue in the body is what gives them potential as a means to study human disease in a petri dish or for use as "replacement" cells for damaged ones.

Trounson is a pioneer of in vitro fertilization and was the first scientist to figure out how to freeze excess embryos for future pregnancy attempts. He's also a sheep farmer who has cloned cows and wombats.

In 1998, he was part of a team of scientists from Singapore and Australia racing to be the first to remove stem cells from days-old human embryos and grow them in a lab. Although they succeeded at producing two human cell lines, University of Wisconsin biologist James Thomson got there first, publishing his findings that November as Trounson's team was writing theirs.

Thomson recently announced an affiliation with UC Santa Barbara, saying that he would spend one month at a research laboratory there. Martin Pera, who worked with Trounson in the stem-cell race in Australia, was hired to direct stem cell research at USC in 2005.

Pera also worked with Trounson to derive pure nerve cells from unspecialized stem cells, lending hope to the notion that the research could lead to treatments for Parkinson's disease, spinal cord injuries and other nerve disorders.

They are among dozens of scientists who have been drawn to California since the passage of Proposition 71.

"This is an excellent move," said John Simpson of the Foundation for Taxpayer Rights, a watchdog group that can be one of the institute's toughest critics. "I am wonderfully impressed and completely surprised."

Dr. George Q. Daley, co-director of the Harvard stem cell institute and president of the International Society for Stem Cell Research, called Trounson a "terrific, inspired choice" and said the willingness of an internationally recognized scientist to give up his laboratory to lead the California institute was a testament to the resources the state has committed to the project.

"This position is going to be the single most important steward of stem cell research internationally," Daley said. "We're all envious of California."

The institute had been without a president since the April resignation of neuroscientist Zach W. Hall, who left two months earlier than his announced retirement date.

Trounson's career has not been free of controversy. He was criticized in 2002 after showing Australian legislators -- who were voting to legalize embryonic stem cell research -- a video of a rat that he said had been cured of paralysis using embryonic stem cells. It turned out that the rat had been given slightly older cells called foetal germ cells.

Trounson said Friday that he had apologized to the parliament and learned "a very valuable lesson about ensuring precision in what you say to people."

Trounson released a "vision statement" Friday, which outlined his relationship with the institute's board.

Calling Klein "a visionary financier and designer of innovative systems," Trounson said that the two would work as partners to "deliver the incredible opportunity of stem cell therapies."

mary.engel@latimes.com

URL for this article:
http://www.latimes.com/news/printedition/california/la-me-stemcell15sep15,1,1296150.story?coll=la-headlines-pe-california

San Francisco Moves to Fill Healthcare Void Being Left by State Government in Sacramento

I've been quiet this week, largely because I had a very full calendar so the blog took a back seat. But today's New York Times chronicles a plan for the People's Republic of San Francisco (I can say that as an expat who left the City by the Bay just about 10 years ago today) to offer healthcare coverage for every uninsured adult.

Rather than wait for the Governator in Sacramento (which I reported previously looks unlikely to get anywhere until the legislature reconvenes later this year), San Francisco is now promoting its plan called Healthy San Francisco, which is apparently the first effort by a locality to guarantee care to all of its uninsured, and represents the latest attempt by state and local governments to patch a woefully inadequate federal system. Other experiments are also going on in places that include Tennessee, Wisconsin, Pennsylvania.

Healthy San Francisco is being financed mostly by the city, which the Times says "is gambling that it can provide universal and sensibly managed care to the uninsured for about the amount being spent on their treatment now, often in emergency rooms." Because the coverage is not portable, officials believe that people with private insurance will have little incentive to drop their policies to take advantage of the city's cut-rate services. But the logic of the plan is undeniable: many people without healthcare insurance regularly delay routine care until they are very sick, at which time, their treatment costs are significantly higher. After a two-month trial of the plan at 2 clinics in San Francisco's Chinatown, the Healthy San Francisco program is scheduled to expand citywide to 20 more locations on Monday, September 17. The idea is that for the same amount of money they are now spending on Emergency Room care, they can enroll people in a more cost-effective preventive care program.

We are seeing examples of these programs being expanded beyond statehouses to some municipalities. San Francisco is not the first, nor will it be the last city to move in this direction. However, the Times article notes "Whether such a program might be replicated elsewhere is difficult to assess. In addition to its unique political culture, San Francisco, with a population of about 750,000, has the advantages of compact geography, a unified city-county government, an extensive network of public and community clinics and a relatively small number of uninsured adults. Virtually all the city's children are covered by private insurance or government plans."

As I have stated previously, we are likely to see a variety of different plans ranging from Tennessee's bare-bones coverage, to more extensive plans in Massachusetts, but the reality is that the Federal government has done little besides talk about this issue since 1993. Today, more than half of all Americans lack healthcare insurance and many of these people work full-time, often in places like Wal-Mart, McDonald's and other bastions of American capitalism. Yet in the past 14 years, the issues have become more severe, especially in states like Texas, which has more uninsured Americans than any other state).

In spite of these grim statistics, the problems have grown in magnitude, so its not surprising that this issue now competes with the mismanaged conflict in Iraq as the top issue for American voters. A patchwork of coverage is far from ideal, but as I have noted previously, it may provide us with a sample of ideas to consider as they lawmakers ponder what approach to take. Regardless, the complete NYT story follows.

San Francisco to Offer Care for Uninsured Adults
By Kevin Sack, The New York Times
Published: September 14, 2007

SAN FRANCISCO - Since contracting polio at age 2, Yan Ling Ho has lived with pain for most of her 52 years. After she immigrated here from Hong Kong last year, the soreness in her back and joints proved too debilitating for her to work.

That also meant she did not have health insurance. Not wanting to burden her daughter, who was already paying her living expenses, Ms. Ho delayed doctors’ visits and battled her misery with over-the-counter medications.

"Sometimes the pain was so bad, I would just cry," she said. "I didn’t know what else to do."

Last month, unable to bear her discomfort any longer, Ms. Ho went to North East Medical Services, a nonprofit community clinic on the edge of Chinatown, and discovered to her delight that she qualified for a new program that offers free or subsidized health care to all 82,000 San Francisco adults without insurance.

The initiative, known as Healthy San Francisco, is the first effort by a locality to guarantee care to all of its uninsured, and it represents the latest attempt by state and local governments to patch a inadequate federal system.

It is financed mostly by the city, which is gambling that it can provide universal and sensibly managed care to the uninsured for about the amount being spent on their treatment now, often in emergency rooms.

After a two-month trial at two clinics in Chinatown, the program is scheduled to expand citywide to 20 more locations on Sept. 17.

Whether such a program might be replicated elsewhere is difficult to assess. In addition to its unique political culture, San Francisco, with a population of about 750,000, has the advantages of compact geography, a unified city-county government, an extensive network of public and community clinics and a relatively small number of uninsured adults. Virtually all the city’s children are covered by private insurance or government plans.

At the bustling North East Medical Services clinic, where the staff and the signs are multilingual, doctors and nurses are trying to build trust with patients who may have last sought treatment from an herbalist. Families crowd the elevators, as teenagers help parents and grandparents navigate the system. Patients like Ms. Ho say they hope their access to the clinic’s services will bring them independence, and a chance to work.

Healthy San Francisco provides uninsured San Franciscans with access to 14 city health clinics and 8 affiliated community clinics, with an emphasis on prevention and managing chronic disease. It is, however, not the same as insurance because it does not cover residents once they leave the city.

After a phased start-up, the city plans to bring private medical networks into the program next year, expanding the choice of doctors. Until November, enrollment will be limited to those living below the federal poverty line ($10,210 for a single person; $20,650 for a family of four). Then it will open to any resident who has been uninsured for at least 90 days, regardless of income or immigration status.

Only then will city officials learn whether the program appeals to middle-class workers, who make up a growing share of the uninsured. And only then can they test whether San Francisco has the medical infrastructure to handle the desired increase in demand, and to do so without raising taxes.

So far, enrollment has exceeded expectations. The city projected that 600 to 1,000 people would sign up by the end of August. More than 1,300 did, even though officials have done little marketing. They hope to enroll about 45,000 people - more than half the city’s uninsured - in the first year. Some clinics are adding night hours and small numbers of workers.

"We really didn’t know what the interest level would be, so we’re very pleased," said Mayor Gavin Newsom. "At the same time, we don’t want overexuberance yet because we don’t want to fall of our own weight."

At the two pilot clinics, efforts are first made to qualify patients for Medicaid or other state and federal insurance programs. Those left over receive a Healthy San Francisco card that makes them eligible for primary care, dental exams, mental health and substance abuse services, hospitalization, radiology and prescription drugs.

Because the coverage is not portable, officials believe that people with private insurance will have little incentive to drop their policies to take advantage of the city’s cut-rate services.

Like Ms. Ho, many of those enrolling were already using the city’s health clinics - or the emergency room at San Francisco General Hospital - in times of acute need, like an asthma attack or stroke. About 57,000 of the 82,000 uninsured San Franciscans have used the city’s health system at some point.

But the new program hopes to persuade them to become regulars who regard their neighborhood clinic as a medical home. Once enrolled, patients are assigned a physician and encouraged to get blood pressure checks, mammograms and other screenings.

"We had a system that was not a system, and was based on episodic visits for chronic and acute care," said Dr. Mitchell H. Katz, the city health director. "The idea that you should come get a cholesterol test, that didn’t happen."

Nor was it uncommon for patients to ignore doctors’ orders because of cost. Before the program started in July, a clinic doctor had ordered X-rays and blood tests for Ms. Ho, but she never got them.

"Now I feel more comfortable coming in to get services and following the doctor’s instructions," she said, speaking through an interpreter. She added that she recently had the recommended tests and is waiting for results.

The program was born of the city’s impatience with federal and state inaction, Dr. Katz said. In 1998, voters overwhelmingly endorsed universal access to health care in a citywide referendum. Over the years, city officials explored ways to provide universal insurance but, like other governments, could not figure out how to pay for it.

"What we did next was profound and simple," said Mr. Newsom, who shepherded the program with Supervisor Tom Ammiano. "We asked a different question. We asked: How do we provide universal health care to all uninsured San Franciscans? And that one modest distinction allowed us to answer the question we hadn’t been able to answer for a decade."

Tangerine M. Brigham, the program’s director, projects that it will cost $200 million the first year, and Mr. Newsom expects to finance it without a tax increase. The city already spends about that much on care for the uninsured, and that money will essentially be redirected to Healthy San Francisco.

The program was also selected by the state to receive a three-year federal grant worth $24 million a year for expanding access to care. And because enrollees are still uninsured, they remain eligible for state and federal benefits, like discounts on AIDS drugs.

Patients are asked to contribute nominal amounts through membership fees and co-payments that vary by income.

Those from families with incomes below the federal poverty line pay nothing. Those who earn more pay quarterly fees that range from $60 to $675, which is the rate for those with incomes above 500 percent of the poverty level ($51,050 for a single; $103,250 for a family of four). That is where the subsidy ends. The co-payments range from $10 to $20 for a clinic visit and from $200 to $350 for an inpatient stay.

A final financing mechanism has placed the program in legal jeopardy. To make sure the new safety net does not encourage businesses to drop their private insurance, the city in January will begin requiring employers with more than 20 workers to contribute a set amount to health care. The Healthy San Francisco program is one of several possible destinations for that money, with others being private insurance or health savings accounts.

Late last year, the Golden Gate Restaurant Association challenged that provision in federal court, arguing that it violates a law governing employer health benefits. A judge has scheduled a hearing for early November.

Mr. Newsom, a restaurateur and former member of the association, said the program would work only if accompanied by an employer mandate. But he said the city would have contingencies if it lost in court. "It may set us back," he said, "but it’s not going to end this program."

Follow-up to Holland's plan ...

On Thursday, I posted commentary on a Wall Street Journal article in my post entitled
"Is the Recipe for U.S. Sick-care System found in Holland?". Before that, I suggested that a patchwork of different plans would emerge until the Federal government got around to addressing the issue. Thats not necessarily bad, what is bad is a patchwork without universal mandates. Yesterday, however, a commentary was posted clearly directed at the same subject that was worth considering. I would like to share that commentary with you and solicit your opinions on the subject.

In essence, the commentary suggests that a big part of the "problem" with the U.S. (and many other countries, for that matter) health (or sick) care system is that the costs are largely invisible to patients. For those of us who have insurance, there is often little regard for the true cost of drugs, tests, doctors fees, hospital fees or anything else because we're only concerned about the co-pay. The author argues that the U.S. tax system has induced workers to believe that someone else was paying the bills for their care, so they have pushed for better health benefits regardless of cost. Again, this suggests that the system in the Netherlands may direct more attention towards the issue by making patients more involved in the cost evaluation. The reality is that the cost has not been "free", we have traded higher wages and other benefits (like vacation time) in exchange for healthcare benefits whether we realize it or not.

Another element worth considering is the author's suggestion that evidence also suggests that many benefits of health insurance, although paid for equally by everyone, flow disproportionately to the affluent. He argues that legal mandates requiring insurers to cover such services as mental-health care and fertility treatment make available, at collective expense, benefits that the affluent are much more likely to use. Personally, I do not believe that insurance should be obliged to pay for fertility treatments, as having children is indeed a choice that many people, including younger and older workers, singles, gay and lesbian workers and undoubtedly other groups are forced to subsidize so that a small group of people can enjoy these benefits. The argument is that a wider variety of plans with different coverage would be available if the system encouraged individual buyers rather than collective purchase of healthcare plans. That I would agree with, but today, plans are really one-size fits all, with little regard to the various services that people actually want or need. Hmmmm, the author may be on to something.

I do not agree that President Bush's plan is worth reconsidering mainly because I believe his plan addresses only half of the problem: it eliminates the incentive for any company to offer healthcare coverage while doing nothing to encourage insurers to provide individual coverage, so its not sufficient. However, I do think its worth looking at individual coverage (something that the Massachusetts and Tennessee plans do), again looking at the plan in the Netherlands might be worth considering. Perhaps its good that the individual states are going their own way, at least initially, then the Feds can mandate that all states need to have a plan in place, as long as there aren't too many mandates. Interestingly, the Dutch plan addresses diabetes, but leaves many other diseases out. I am a bit troubled by that, but its a starting point, anyway. I'm curious about what everyone else things. Please, chime in!


Commentary: Who Pays for Health Insurance?
By Clark Havighurst and Barak Richman, The Wall Street Journal
September 6, 2007; Page A17

New census data showing that the number of Americans without health insurance increased by 2.2 million in the past year (to 47 million) undoubtedly deserves the attention it is getting. But the increasing size of the uninsured population is only a symptom of deeper problems in American health care, not the problem itself. Indeed, concern for the uninsured obscures the plight of middle- and lower-income workers who do have health coverage but pay dearly for it.

In many cases, those who drop their health coverage do so for rational reasons. They apparently prefer to run some financial and health risks rather than pay for insurance that now costs the average family $12,000 annually. The American health-care system resembles all too closely an extortion scheme that forces individuals to either pay a very high price or put their families' health in danger. It is not surprising that many working Americans are deciding not to take it anymore.

Ironically, many more Americans would probably drop their health coverage if they knew how much it really costs them. But they don't know, because of the way the tax system treats health benefits. Under the current system, employers are the principal purchasers of health insurance, and workers seldom know how much their employers pay. They also don't realize what economists have repeatedly concluded: Employer outlays for health insurance translate directly into less take-home pay for employees.

Because the tax system has induced workers to believe that someone else was paying the bills for their care, they have pushed for better health benefits regardless of cost. Benefits have thus become more comprehensive and expensive than makes economic sense for most working families. Likewise, because voters haven't fully understood who pays for health care, they have supported laws and regulations that strongly reflect the values and interests of the health-care industry and its most affluent customers. Consequently, unlike ordinary consumer products, health coverage does not come in a range of models suited to different pocketbooks.

Weak consumer cost-consciousness has left the U.S. with private insurance that functions as a reverse Robin Hood scheme, taking from middle-income Americans to support a health system that benefits many elite interests. A significant fraction of the cost individuals incur for health coverage goes not to pay for care they and their families receive, but to support a variety of industry activities and projects, including medical education and research and the building of costly facilities. Even assuming the industry pursues only socially worthwhile goals, its otherwise uncompensated efforts should be financed by a fair system of taxation. At present, many such costs fall on premium payers like a regressive "head tax" rather than in proportion to their income or ability to pay.

Evidence also suggests that many benefits of health insurance, though paid for equally by everyone, flow disproportionately to the affluent. For example, cost-sharing requirements deter lower-income individuals from using their coverage more than they deter wealthy ones. The latter also know how to manipulate the system to obtain more and better services at plan expense. Legal mandates requiring insurers to cover such services as mental-health care and fertility treatment make available, at collective expense, benefits that the affluent are much more likely to use.

Particularly in view of the widening income gap between middle- and high-income earners, serious attention should be given to how the health-care system takes lots of money from the working class without giving them commensurate value for much of it. One does not have to be a populist to see the unfairness (as well as the tendency to increase the uninsured population) of forcing workers to pay unjustifiably high prices as a condition of being insured at all.

A good way to prepare the public for needed health reforms would be to expose consumers to the true cost of health insurance. President George W. Bush's pending proposal to tax the value of employees' health benefits as income, while also providing a compensating standard deduction or tax credit, would serve the useful purpose of stimulating market and political demand for low-cost alternatives, including coverage that stops short of paying for everything seemingly mandated by professional (that is, non-economic) standards.

Congress is making a mistake in ignoring the president's proposal. If voters realized that it is not only the uninsured whom the current system victimizes, would-be reformers of all stripes might finally find a broad constituency willing to support fundamental change.

Messrs. Havighurst and Richman are professors at Duke Law School.

URL for this article:
http://online.wsj.com/article/SB118904358759518916.html

Is the Recipe for U.S. Sick-care System found in Holland?

This morning's Wall Street Journal features an article about the healthcare system in the Netherlands, which some see as a model for the U.S. system, which is widely acknowledged to be broken. Contrary to many other plans in other parts of Europe which are largely government-run healthcare systems Holland requires adults to buy their own health insurance or else pay a penalty, and insurers must offer policies to everyone, no matter how sick or old they are. This means the Dutch system also differs from U.S., which relies mostly on private employers paying for the bulk of coverage.

Recent reports by the U.S. Census Bureau have found that 47 million Americans (somewhere around 14-17% of the population), most of whom are working full-time jobs, lack healthcare coverage. However, for many -- especially those with what are commonly referred to as having "pre-existing conditions" like diabetes or heart disease, its almost impossible to obtain a private insurance plan, and too often, cost-prohibitive even if they can find a plan. As a result, too many uninsured wait until their health is in poor condition before seeking medical treatment in hospital Emergency Rooms, where they cannot be denied treatment. As a result, many end up with costly treatments that in many cases, could have been prevented with proper medical care had they seen a doctor up-front. The U.S. system is not so much a healthcare system, but a "sick-care" system meant to treat illness rather than encourage wellness and prevent health problems.

Today, according to preliminary survey findings released by the health and benefits unit of Mercer Human Resource Consulting, it was reported that health benefits costs are expected to grow 6.7% in 2008, after increases of around 6% in prior years. The results represent responses from 1,557 employer health plan sponsors. Mercer said around 3,000 employers will ultimately participate in the survey and complete results will be released by the end of the year. 56% of the employers surveyed said that they will require employees to pay a bigger share of health plan costs in 2008. Employers may seek to implement higher premium contributions, deductibles or co-payments, among other actions, Mercer said.

Although the Dutch system is unlikely to address the rapidly-rising costs of care, it can address the issue of insurers' cherry-picking only the youngest and healthiest patients that many U.S. healthcare insurers now make a standard operating procedure. The system in Holland does this with a combination of laws prohibiting the practice of cherry-picking and with what is referred to as "risk-equalization" -- effectively government subsidization of coverage for those who are less healthy.

In an ironic turn of events, the article notes that the Dutch system was the basis of many elements found in President Clinton's 1993 plan that failed to pass. Apparently, it has come full circle, with Hillary Rodham Clinton as the author of the initial plan now running for U.S. President in 2008. The article follows:


In Holland, Some See Model For U.S. Health-Care System
By Gautam Naik, The Wall Street Journal
September 6, 2007; Page A1

Private Insurers Compete, But All Get Coverage;

THE HAGUE -- The Netherlands is using competition and a small dose of regulation to pursue what many in the U.S. hunger to achieve: health insurance for everyone, coupled with a tighter lid on costs.

Since a new system took effect here last year, cost growth is projected to fall this year to about 3% after inflation from 4.5% in 2006. Waiting lists are shrinking, and private health insurers are coming up with innovative ways to care for the sick.

The Dutch system features two key rules: All adults must buy insurance, and all insurers must offer a policy to anyone who applies, no matter how old or how sick. Those who can't afford to pay the premiums get help from the state, financed by taxes on the well-off.

The system hinges on competition among insurers. They are expected to cut premiums, persuade consumers to live healthier lives, and push hospitals to provide better and lower-cost care.

Some are already taking unusual steps. The insurance company Menzis has opened three of its own primary-care centers to serve the patients it insures, and plans to open dozens more in a move to lower costs. Rival UVIT offers discount vouchers to customers who buy low-cholesterol versions of yogurt, butter and milk.

To prevent insurers from seeking only young, healthy customers, the government compensates insurers for taking on higher-risk patients. Insurers get a "risk-equalization" payment for covering the elderly and those with certain conditions such as diabetes.

Three years ago, Rianne Boel, who works in a store that sells large-size clothes for women, weighed 293 pounds and suffered from type 2 diabetes. She joined a new UVIT program that promised to pay her back about $676 for gym membership -- provided Ms. Boel lost 7.5% of her weight in 15 months.

The 45-year-old, who lives in the town of Tilburg, says she stopped eating french fries and pizza and took up an intensive regimen of walking, cycling and rowing. She met her weight-loss target and used the gym-membership rebate to buy some new clothes.

Ms. Boel now hopes to manage her diabetes more efficiently and lose more weight. "I don't like exercising," she says, "but at least I can now walk without a stick." That's welcome news to UVIT. Says spokesman Bert Rensen, "Once she stops using insulin, which we pay for, it will save us €900 [about $1,200] a year."

Likely Opposition

What works in the Netherlands, a small country of 16.6 million people, may not readily apply to America. A Dutch-style scheme would likely raise opposition among U.S. doctors and Republicans who are cautious about higher taxes. But many U.S. states are similar in size, and one, Massachusetts, is already experimenting with a universal-coverage scheme.

"The lesson for America is that this is what we ought to do," says Alain Enthoven, a professor at Stanford University.

Three decades ago, Prof. Enthoven published a pioneering proposal for what he called "managed competition," a version of which the Dutch have now adopted.

The Enthoven plan partly inspired the Clinton administration's failed health-care overhaul effort in the 1990s. It has now come full circle. Last October, an economist from the Dutch health ministry was invited to describe his country's new approach to about 50 Massachusetts politicians and policy makers in Boston, as the state was developing its own plan for mandatory health insurance.

After being sidelined for more than a decade, health care is once again a hot issue on the U.S. political agenda. Two leading Democratic presidential candidates, Sen. Barack Obama of Illinois and former Sen. John Edwards of North Carolina, have backed the idea of universal coverage and suggested ways to achieve it. California Gov. Arnold Schwarzenegger, a Republican, has pushed a proposal to require all state residents to obtain health insurance, but he hasn't been able to strike a deal with state legislators to enact a plan.

The notion of competition among insurers is nothing new to Americans. Most Americans under 65 get insurance via their employer, which can compare plans and pick the one that it thinks offers the best coverage for the money. To cut costs, U.S. insurers bargain with doctors for discounted rates and try to weed out overbilling and frivolous treatments.

The system has failed to stop U.S. health costs from shooting up, and it has left many doctors complaining that their medical judgment is being second-guessed by bean counters. It isn't clear that a Dutch-style system, also centered on insurer competition, could do any better. Dutch doctors were among the most vociferous opponents of an overhaul and many remain skeptical.

Still, there are some differences in the Dutch way that may work to its advantage. One is the emphasis on individuals buying coverage. In the U.S., employers tend to be poor buyers of health care. They're unfamiliar with the needs of the people actually using the health care -- their employees -- and it is difficult for a large company to switch insurers.

By putting the onus on consumers, Dutch officials hope that more people will get the coverage they need. The "risk equalization" that helps Dutch insurers cover sicker people is also critical. In the U.S., competition among insurers often means competition to find the healthiest customers, especially in the individual market.

The Netherlands began to overhaul its health system in 1987 after a government committee concluded that the best approach was "managed competition," the idea first proposed by Prof. Enthoven of Stanford.

The task was enormous. The country had four different coverage schemes. The wealthiest third of the population was required to get health insurance without government assistance. Some in this group received help from employers in paying premiums, while others paid the whole bill themselves. The bulk of the Dutch population was covered under a compulsory state-run health-insurance scheme financed by deductions from wages. Civil servants and older people were insured under two separate plans within this state-run scheme.

The government closely regulated hospital budgets and doctors' fees, but provided few incentives to cut costs. When hospitals lost money on a particular kind of care, they rationed it. Many patients ended up on waiting lists.

People in line for heart transplants were particularly affected. In the mid-1990s, fewer than three Dutch people per million received such transplants. By comparison, a study of 12 European countries showed that only Greece had a lower rate of such operations. In the U.S., there were about nine heart transplants per million people.

In 1999, waiting lists increased by 2%, despite a $54 million initiative to reduce them. "Dead on the waiting list," read one cover story of Vrij Nederland, a weekly magazine that, like other Dutch media, relentlessly criticized the country's health system.

"We felt frustrated," recalls Hans Hoogervorst, who was the health minister from 2003 to early 2007 and a major force in pushing through the overhaul.

Though the Dutch still enjoyed better health than the residents of many developed countries, standards were slipping. Between 1960 and 2000, the increase in Dutch life expectancy was 4.5 years, while its neighbors, Germany and Belgium, showed far better increases of 8.1 and 7.1 years, respectively, according to the Organization for Economic Cooperation and Development. In the U.S., the increase was nearly seven years.

As in the U.S., medical costs began to increase, driven by an aging population and the increased use of expensive new technology. Between 2000 and 2004, Dutch health spending as a share of gross domestic product shot up to 10% from 8%.

In late 2004, the Dutch House of Representatives passed a law to usher in mandatory health insurance and switch people on state-run insurance to private carriers. But family doctors fretted that it would allow insurers to interfere in medical decisions, for example by pushing cheaper drugs.

The following May, thousands of Dutch general practitioners went on a three-day strike. Some tied their hands together with rope to symbolize their helplessness. In response, Mr. Hoogervorst promised to provide some protections for doctors in the new legislation. One of them was that patients wouldn't bear a big financial cost if they chose to go to a doctor not under contract with their insurer. Soon after, the senate approved the new plan.

It took effect on Jan. 1, 2006. Despite predictions of chaos, the changeover was surprisingly smooth. The government set up a Web site where consumers could analyze insurers' offerings. Consumers were allowed to switch insurers once a year. As 2006 approached, the health ministry predicted that only 5% would bother. Instead, nearly 20% of people switched, either to get a better price or because they were dissatisfied with their insurer.

Premium War

Consumers also benefited from a premium war as insurers made a grab for market share. The Dutch health ministry had predicted that insurers in 2006 would price the annual mandatory premium at an average of €1,106, or about $1,500. Instead, market forces set it at €1,028, 7.6% lower. This year, it has risen to €1,103, partly because of an easing in the price war. That's still less than the €1,134 the government predicted for 2007.

Included in the overhaul was a deal the government negotiated with generic-drug makers to cut prices by about 40%. The generic-drug makers made up for some of their lost revenue by reducing the rebates and bonuses they provided to pharmacists to recommend their drugs to customers. From 2004 through 2006, annual drug spending grew at an average annual rate of 2.8%, down from 9% annual growth earlier in the decade.

Insurers have taken a hit, though. UVIT, which has more than four million customers, was forced to open a 200-person call center to help consumers switch between plans. In 2005, UVIT had total revenue of about $7.6 billion and made a profit of about $202 million from health insurance, which is its main business. Last year, the company's health business posted a loss of $30 million. UVIT expects to return to profitability this year, partly by negotiating lower prices with hospitals.

In most European countries, consumers have no idea what their health insurance costs because they are covered by national health-insurance schemes financed by payroll taxes, as used to be the case in the Netherlands. On a visit to Germany last year, Mr. Hoogervorst boasted that thanks to his country's switch to private insurance paid by individuals, "no other European country has a population so keenly aware of the costs of their health-care insurance."

Now that they see the bills more clearly, some consumers feel their payments have gone up. In one survey mainly of labor-union members, about 70% said they were financially worse off in some ways.

Insurers get risk-equalization payments for patients with about 30 major diseases. They can use these to offer discounted premiums and programs tailored to those with heart disease, diabetes and other ailments.

One shortcoming is that many diseases aren't subject to risk equalization. The excluded diseases -- such as migraine headaches -- are harder to diagnose and their treatment costs are harder to predict. "Seen from the side of migraine patients, this is highly unfair," says Peter Vriezen, president of the Dutch Headache Patients Association.

The real test of the Dutch approach is yet to come: Can insurers push hospitals to lower their costs and improve their quality? Insurers have clout because they can direct large numbers of patients toward particular hospitals. But, in a holdover from the old system, insurers can currently negotiate prices for only 10% of the services hospitals offer. The figure will rise to 20% by the end of this year, and continue to go up.

Because Dutch hospitals used to receive fixed prices for their services, and got more money for more service regardless of quality, they had little incentive to improve their care. Under the new system, insurers should be providing that incentive, but Mr. Hoogervorst acknowledges, "There's still a long way to go to increase competition among hospitals."

Market Incentives

One concern is the potential for overconcentration among insurers. UVIT, for example, is the result of a merger between four insurers. "If eventually you have only three or five insurers, you might wonder how many market incentives will remain," says Niek Klazinga, professor of social medicine at the University of Amsterdam.

Last fall, Prof. Enthoven delivered a speech to health economists in Rotterdam. He congratulated the Dutch for being "in the lead" in health-care change. However, he cautioned, "you still have considerable work ahead of you to transform your present success with insurance" into a system that delivers improving care.

Some insurers are taking unusual steps to get there. Menzis rewards doctors with bonuses if they prescribe generics instead of more expensive branded drugs. UVIT ranks hospitals based on the quality of care.

To put pressure on Dutch hospitals, some insurers let patients go to other countries where high-level care for certain ailments costs less. Thea Gerits, 71, went to Germany for a hip replacement and spent four weeks in a rehabilitation center there, receiving physical therapy and enjoying yoga, massages and mud baths.

UVIT paid the $19,000 bill. It says the same amount in the Netherlands would buy only the surgery and basic therapy. Ms. Gerits came home happy, and soon was riding her bicycle again. "I got lots of attention," she says. "It was like a spa."

Write to Gautam Naik at gautam.naik@wsj.com

URL for this article:
http://online.wsj.com/article/SB118903445878218649.html

Flexing Our Collective Muscle

This morning, the blogosphere has a few interesting posts on how our "friends" in the pharmaceutical industry managed to snowball many of us. Notably, Allie Beatty at The Diabetes Blog documents on how this could happen in her post "The Insulin Evolution" on how we allowed insulin to evolve from merely hormone replacement into a genetically modified hormone. Interesting stuff.

But, today several other bloggers are answering exactly how that happens in today's environment, including BrandWeekNRX who has summarized an explanation on how pharmaceutical marketers are using the web to fool the FDA, with various tricks such as having pharmaceutical companies pose as consumers on social networks, or Wikipedia sleight-of-hand edits which were highlighted recently as it was recently reported that some drug companies made Wikipedia edits anonymously.

I have seen the latter one first-hand, as Wikipedia edits I made myself made were somehow removed. But big pharma may not have counted on vigilance from enlightened consumers who have reversed their Wikipedia slight-of-hand edits anonymously as well. Nevertheless, pharmaceutical industry consultant John Mack, who has worked to stop the slippery slope of these evil violations has decided no one listens anyway, so he's decided to sell what he knows. See the Pharma Blogosphere for more complete details. Just remember, patient groups can also obtain the same information and can use it against those who try to mess with us!

The Diabetes Blog's Allie Beatty also posted one way around these issues today on how patients can now report drug side effects to the FDA themselves via the web, so the next time you have a hypo for no apparent reason and you have accounted for every gram of carbohydrate, fiber and fat, and you started at the perfect blood glucose level, yet you end up low hours later for no apparent reason, consider filing a report with the FDA. Contrary to what you may believe, not every low or high is caused by patient error, but the FDA needs to know about it! See that posting here for details.

To understand why big pharma does this, consider the regulations imposed on them for advertising relative to other products. Imagine, for a moment, what the military's ads would be like if they had disclaimers like drug ads?

None of this is reassuring to patient groups. Its a scary world out there, and I think many of us in the the diabetes blog universe are on to many of these tricks already, and have worked tirelessly to rectify some of these things when examples emerge, but more of us need to be doing the same thing! Collectively, patient groups can flex our collective muscle on many of these issues (such the role as Allie Beatty, Amy Tenderich, Kathleen Weaver and my reporting played in dooming Exubera). Notably, Michael Krensavage, a pharmaceutical equity analyst at Raymond James Financial, Inc. recently told Forbes that "Exubera has been one of the most spectacular flops in the pharmaceutical industry." But I would encourage more of you to take it to the next level so that such tricks and games are less prevalent in the future!

American Cancer Society's Effort Could Also Benefit Diabetes

Can the American Cancer Society's marketing efforts benefit people with diabetes? We may find out next year. In what was arguably one of the biggest news stories in the nonprofit arena recently, The New York Times is reporting that next year, the American Cancer Society announced plans to devote its entire $15 million advertising budget to the consequences of inadequate health coverage.

Two 60-second television commercials that form the bulk of the campaign make that point readily apparent. One features images of uninsured cancer patients, appearing hollow and fearful. "This is what a health care crisis looks like to the American Cancer Society," the narrator begins. "We're making progress, but it's not enough if people don’t have access to the care that could save their lives."

While its certainly a change in the organization's marketing tactics, from the American Cancer Society's perspective, they see it as a critical element in the fight against cancer. After all, they know that the uninsured are less likely to get recommended cancer screenings, thus are more likely to be diagnosed in more advanced, and often more deadly, stages of the disease. As you might imagine, patients with diabetes are also caught in the dysfunctional U.S. healthcare system, and their prognosis is similarly poor.

According to a 2006 report published by the International Diabetes Federation, the authors used estimates that approximately 45 million people in the U.S. (roughly 17% of the working-age population) are not covered by health care insurance. Using simple, back-of-the-envelope calculations, given that roughly 6% of people in the U.S. have diabetes, of the approximately 45 million people with no healthcare cover, we can conservatively estimate that approximately 3 million people with diabetes in the U.S. lack healthcare insurance. According to a number of different studies, their prognosis isn't good. For example, analysis of a study done in 2002 revealed that when compared to people who had health insurance, people without any form of health insurance who have diabetes received fewer preventive diabetes care interventions and showed generally less-desirable diabetes outcomes. Specifically, a higher percentage of uninsured people had HbA1c levels of 9% or higher; fewer had an annual blood lipid test and/or annual foot exam. It's hard to imagine, but on average, fully one-fourth (25%) of people with diabetes go without a checkup for 2 years if they have been without health insurance for a year or more vs. only 5% of diabetes patients with insurance.

This year, the cancer society formed a collaborative with the heart, diabetes and Alzheimers associations, as well as AARP, to promote awareness of the health access problem. The group adopted as common principles that all Americans deserve quality, affordable health care with transparent costs. While the leaders of the American Diabetes Association, as well as the American Heart Association and the Alzheimers Association applauded the American Cancer Society's campaign, indicating that progress against chronic disease would also be halted until the country fixed its health care system, so far, none of the other organizations have altered their own advertising budgets to seriously promote the issue. But the Times reports that with nearly $1 billion in revenues, the cancer society is the wealthiest of its peers and has spent about $15 million annually on advertising since 1999. By comparison, GEICO, the automobile insurer with the "Caveman" advertisements, spent about $14 million on network advertising in the first quarter of 2007, according to TNS Media Intelligence, a tracking firm.

Healthcare reform is shaping up to be a key issue for the 2008 presidential election, and deservedly so. According to the Washington Post, candidates from both parties are developing plans to address this issue, albiet none of their approaches are terribly radical. But leadership in Washington, including the President and Congress, have largely ignored the issue since 1993, when then President Clinton and his wife attempted to reform the system with what was then derided as "Hillary Care" which died a very painful death. Since then, Congress has done little besides talk about the issue.

In August 2007, the U.S. Census Bureau released data showing that a record 47 million Americans did not have health insurance last year. In spite of these issues, the expense of the U.S. healthcare system has grown (and is expected to explode as the baby boom retires) while the U.S. rankings have slipped behind many countries, including most of Europe, Japan, and even countries including Jordan! Our life expectancy now ranks 42nd, down from 11th two decades earlier, according to international numbers provided by the Census Bureau and domestic numbers from the National Center for Health Statistics.

Some candidates, notably Republican Mitt Romney, who credits himself for the Massachusetts plan (the nation's first), has recently said he would leave the responsibility up to individual states. Using California as an example, that may be easier said than done. The San Diego Union-Tribune is reporting that Governor Schwarzenegger's ambitious plan to overhaul the state's health care system and cover California's estimated 6.5 million uninsured residents is quickly running out of time. The Legislature is scheduled to adjourn Sept. 14, and Assembly Speaker Fabian Núñez recently threatened to bring the proposal for a vote of "no confidence" in the California Assembly, but then backed away. Meanwhile, other states are grappling with the issue in different ways.

Back in April, for example, The Wall Street Journal reported (if you have an online subscription to the WSJ, the article is accessible here) on a universal coverage program engineered by Tennessee Gov. Phil Bredesen, which won national attention as states try to develop plans for universal health care. The only problem is that Tennessee's plan may be more affordable for states that cannot afford plans as extensive as those introduced in more affluent states like Massachusetts or California, but participants in the Tennessee plan get coverage up to a maximum of $25,000 for health expenses annually, and only $15,000 of that can go to hospital bills. If a patient becomes seriously ill or has a major accident, they'll be just as vulnerable as they were before, being forced to either pay the bills themselves or ask the hospital for charity care.

To be fair, BlueCross BlueShield of Tennessee says that many people in the state can't afford comprehensive coverage and don't seem interested in high-deductible policies that offer protection against catastrophic expenses for as little as $100 a month. And for those who would otherwise go uninsured, a big advantage of the Tennessee plan is the steep discounts that BlueCross can extract from doctors and hospitals. That will stretch the $25,000 further, says Stan Roberts, health-practice director at Milliman Inc., a Seattle consulting and actuarial firm.

Until Washington approaches this issue seriously and there are Federal standards on healthcare coverage, we're likely to end up with a patchwork of different plans across the 50 states (some deride it as Balkanized coverage, but truthfully, all of the Balkan countries have better healthcare systems than the U.S.). But if the American Cancer Society's advertising campaign works, its possible our politicians will be forced to address the issue in a manner not seen since 1993, regardless of who is in the White House!