Love and Money

Health care providers recently sent a love letter to the Obama administration. During Clinton-era reform attempts, they protested fiercely and loudly. Now they're pledging fervent loyalty.

"The times demand and the nation expects that we, as health care leaders, work with you to reform the health care system," wrote a group representing hospitals, health insurance companies, doctors, drug makers, medical device makers and labor. They pledge to simplify administrative costs, make hospitals more efficient, reduce hospitalizations, manage chronic illness more effectively and improve health care information technology. (Wall Street Journal)

Why all the love?

The Obama administration is intent on reducing cost increases in the American healthcare system by $2 trillion over the next decade. And this time the political and public support seem in place to make it happen. Suddenly, a lot of money is at stake, and the healthcare sector is a strong performer on Wall Street. 

Average Stock Performance (Equal Weight)

Compound Annual Growth Rate between 2006 and May 15, 2009

Diagnostics  +07%

Big Pharma  -05%

Hospitals  -06%

S&P 500  -13%

Big Managed Care  -14%

(Thomson One, 5/15/09)

Cupid has many muses. For the love of money, maybe a little kumbaya will finally make reform a reality.

—Tom DeSanto

Image: www.sarahbaingallery.com 

Drugs, Toilets and Teenagers

Prescription medicines are turning up in unintended and dangerous places: toilets and teenagers.

Drugs consumed by Americans have risen 12 percent over 5 years, reaching 3.7 billion prescriptions and 3.3 billion nonprescription drugs in 2007. Use of veterinary drugs, including treatments for pets and steroids for livestock, has  also increased. More drugs create more cause for concern.

Pharmaceuticals have been discovered in the drinking water of at least 41 million Americans. Traces enter our water supply either because drugs are not fully metabolized or are discarded improperly. Hospitals and nursing homes flush about 250 million pounds of pharmaceuticals down toilets every year. Municipal water treatment-plants are ineffective in removing cholesterol-reducing medications, tranquilizers and many other widely used drugs. Environmental studies demonstrate that even trace amounts of these compounds have adverse effects on aquatic wildlife. Laboratory studies also show that exposure causes disruption to human cellular processes.

Prescription pharmaceuticals are abused by nearly 2.1 million American teenagers. For 20 percent of teenagers, it's the illicit drug of choice, second only to marijuana. Pain relievers such as Vicodin and OxyContin are most commonly abused and 64 percent of teens who take them report getting them from friends or relatives. The risk of adverse reactions or death is high because they take various prescription drugs together and in combination with alcohol. 

Pharmaceuticals need to be treated as controlled substances at all times. We can help keep drugs out of the water supply and the hands of teenagers by locking up prescription medications and discarding them properly when no longer needed. Until a better means of disposal is adopted, we can crush leftover doses, mix them into coffee grounds, cat litter or other undesirable material, bag them up and place them in the trash. 

We need to tell teenagers that prescription drugs are safe when properly taken, but are as dangerous as more notorious drugs when abused. These seemingly benign drugs, flowing freely among teenagers, can quickly take their health and future down the toilet.

—Tom DeSanto

Sources: IMS Health, The Nielsen Company, Associated Press, Substance Abuse and Health Services Administration

No Mom Left Behind

Births to unmarried mothers in the U.S. rose by 26 percent between 2002 and 2007, according to a new study from the CDC. Nowadays 4 out of 10 babies are born outside the traditional married-parent household.

The health implications are enormous.

Studies show that babies born to unmarried women are at higher risk for low birthweight, premature delivery and infant death. The health of the baby and mother are also dependent on available economic and social resources, which tend to be lower for this group.

Unmarried mothers now are spread throughout all population segments, so out-of-wedlock births aren't solely related to socioeconomic factors.  The largest number of them are in their early 20s, instead of their teens. Social norms have shifted.

Infant mortality is a dramatic shortfall of the U.S. healthcare system. With trends moving away from better-outcome, married-couple births, we will have to be diligent in ensuring proper prenatal care for the growing number of twenty-something moms, plus well care and immunizations for their babies.

These new family units also are likely to lack resources and place additional burden on an already overstretched public health system.

With so many demands and a mandate to reduce costs, it will be difficult to institute healthcare coverage that ensures no mom is left behind. But if our hope is to provide a better life now and for future generations, we can't afford not to do it.

—Tom DeSanto

Image: Mother Holding Baby, 1986 by Keith Haring, available at art.com

Health Care Fraud and ROI

Today, the Obama administration proposed a multi-year $1.7 billion increase in funding for the Health Care Fraud and Abuse Control Program. What kind of ROI might we expect from that investment?

It is estimated that 3 percent of America's health-care spending is consumed by fraud each year. In 2008, approximately $68 billion was lost to fraud. $60 billion of the fraud losses involved Medicare and Medicaid.

The Coalition Against Insurance Fraud estimates that every $2 million invested in fighting health-care fraud returns $17.3 million in recoveries.

Accordingly, the proposed investment could yield $14.7 billion in fraud recovery, representing a 7.65 percent return on investment.

The Health Care Fraud and Abuse Control Program is a reasonable short-term investment, if the increased budget is used effectively. Over the long term, rooting out fraud and abuse will pay dividends in a more efficient health-care system.

Will the government keep the $14.7 billion as part of cost-cutting measures or will America's citizens reap the savings to preserve and restore their health? Only time will tell.

—Tom DeSanto