Importance of Medicine

There will be many who will applaud the recent actions of Maine insurance Commissioner, Mila Kofman, in requiring health insurers to write individual policies at a loss, and of Massachusetts insurance regulators in denying any increase in premiums, as the sort of concern for the little guy which is needed in today's difficult times. However, those accolades are misplaced, and these actions will prove counterproductive, especially for those they are intended to help. Experience tells us that a far better approach is to avoid interference with market forces and provide direct public assistance for those most in need. All states need to heed this lesson.

In the first place, the requirement of selling without profit is arguably unconstitutional. The Fifth Amendment to our Constitution prohibits our government from taking anyone's property without due process of law. Forcing any firm to sell at or below cost for any reason - no matter how magnanimous - is doing just that. When government needs private property for some public purpose, it must pay fair market value for it, with legal recourse available to ensure that fair value is paid. When a firm is considered to be essential to the public, it is deemed a public utility and its prices or rates are subject to regulation by a public body. Critically, under the Constitution, such regulation is intended to provide the utility with a capped but fair profit or return on its capital. Numerous cases going back to at least the Supreme Court's Penn Central decision in 1978 have held that failing to do so would be ultimately confiscating the utility's capital in violation of the Fifth Amendment. Medical insurers have never been deemed public utilities, so any attempt to impose this sort of rate regulation - even if it provides for breakeven pricing - is clearly unwarranted. Even public utilities are entitled to some sort of profit, so requiring other firms to sell at a loss is unheard of.

More importantly, this approach will fail at its purpose of making coverage more available. Even to the extent that we are legally permitted to control the price of a good or service, we are unable to control its supply. That is, we can not force a firm to remain in a particular market if it does not believe that it is earning a satisfactory return. The shortages of gasoline and other items resulting from the Nixon-era wage and price controls reflect this truism. More recently and in the insurance industry, when in the aftermath of Hurricane Charley, the state of Florida sought to prevent what administrators felt were excessive rate increases by property insurers, several large carriers simply stopped doing business in Florida. There is nothing that can be done to compel an insurer to continue to offer policies at all, if it feels that in doing so, it will incur losses.

If insurers are forced to stop offering insurance because they can not earn sufficient (or any) returns on their capital, the result will be higher prices charged by those remaining and/or forced rationing of care - the opposite of what regulatory action seeks to achieve.

In any event, this regulatory approach is superfluous in that insurance premiums are heavily influenced by broad societal forces, namely the amount of care which is required, and the unit cost of that care. Notwithstanding the rhetoric of many lawmakers and regulators, there is no financial metric indicating that medical insurers are earning "excessive" profits or returns on capital beyond (or comparable to) those realized by firms in other industries. Numerous studies indicate that the large premium increases which we all love to hate, result much more from the claim cost which is incurred for ever-more expensive, but often extremely beneficial care, increasing life expectancies and Americans' self-inflicted maladies such as complications from obesity, poor diets, lack of exercise, smoking and the like, than from any sort of "profiteering". Even with increasing capabilities from medicine, as Americans incur new medical problems and live longer, the aggregate cost of care is driven up, without any benefit to insurers.



It is time for lawmakers and regulators to demonstrate some genuine leadership in health matters, and talk sense to their constituencies, rather than continue spouting this sort of pseudo-populist rhetoric.

Altogether, the Investigative Fund identified 237 reports of "adverse events" associated with health information technology reported to the FDA over the past two years. Most problems involved computerized medical ordering software or systems that supply the software with vital information, such as recommended doses of medicine or test results. Most of the adverse events recorded in FDA files were blamed on software malfunctions, user error or the system's lack of user friendliness.

While the reports open a rare window into troubles involving computerized records, much is still not known. Locations, names of institutions and the identities of patients are redacted from FDA data obtained by the Investigative Fund. Many reports don't say what ultimately happened to the patients and could not be independently verified by the Investigative Fund.

There's no way to know how often these problems arise. Most reports to the FDA are submitted voluntarily by health professionals, so the reports provide only a random snapshot of the problem. Meanwhile, the FDA itself is largely in the dark; it lacks a reliable, systematic method of tracking the safety of health information technology.

Justin Starren, a physician who oversees technology at the Marshfield Clinic in Wisconsin, lays out the dilemma starkly: "Computers are strong medicine. Done well, they are wonderful; done poorly they can kill people," he said.

David Blumenthal, who oversees stimulus payouts as the government's national coordinator for health information technology, said that he hasn't seen evidence that "merits a lesser commitment to implementing CPOE."

He said the CPOE devices can greatly help doctors make better decisions in treating patients. Medical experts advising the government have been "virtually unanimous" in concluding that on balance CPOE "improves the safety of care," Blumenthal told the Investigative Fund when asked about its findings.

Even so, he acknowledged concerns, saying, "We are looking at this issue closely."

Since late December, 18 reports received by the FDA involved one manufacturer, Cerner Corp., which sells CPOE devices and other electronic record systems.

One patient died after an "unplanned hospital wide CPOE and electronic record breakdown," which in turn resulted in late or missed doses of medicines, according to one report. "Considering the size of the institution, it is possible that other patients were adversely affected by comparable delays and omissions," stated the report.

Most of the reports filed by physicians alleged malfunctions or poor designs of Cerner's CPOE equipment. One criticized "user unfriendly interfaces" and screens with a small font size and "extraneous and distractive" information that had led pharmacists to overlook changes in medication orders.

Another report described how health care personnel had trouble reading orders on the computer screen - causing a "life threatening acute asthma attack" in a patient given the wrong drug.

Gay Johannes, Cerner's vice president and chief quality officer, said in a prepared statement that the company maintains an "internal process" for resolving complaints about its products. "We continue to follow this process that has been in place for many years and investigate all claims Cerner receives or are filed with the FDA." [Click for the full statement.]

She said that Cerner also voluntarily reports incidents to the FDA because the company "believes such disclosures provide much-needed transparency into the successes and challenges of these types of systems." The company did not respond to requests for comment on individual reports.

The FDA also wouldn't discuss the reports or say what action agency officials or manufacturers took in response.

'Systems Do Fail'

Taken as a whole, the FDA reports show that making the complex systems work properly involves far more than simply transferring paper records into a digital format.

Health professionals use CPOE to type in orders for prescription medicines, diagnostic tests and the patient's treatment plan. The information then is shared electronically throughout the hospital.  Drawing on computer databanks, the systems can warn doctors of harmful drug interactions and help guide their medical decisions--functions that Obama administration officials promise will significantly improve health care delivery.

Citing this potential, the Obama administration wants to spend as much as $27 billion in economic stimulus funds to help doctors and hospitals adopt the systems and create a digital medical record for every American by 2014. To qualify for the first phase of funding, which starts later this year, hospitals must install the CPOE systems and use them in at least one in every 10 transactions with patients. 

But many health information technology experts say past experience at hospitals indicates a need to phase in the systems gradually. Without greater attention to safety, several experts said in interviews, the stimulus plan might backfire, eventually discouraging their use, as risks and costs eclipse advertised benefits.

 "Simply pushing CPOE as an unalloyed good has a great potential to negatively influence quality and increase cost," said Starren, of the Marshfield Clinic. Experts generally expect successful installation to take the average hospital several years. Three is "about the fastest CPOE can realistically be implemented effectively," said Starren. "Most places take longer."

Other experts said that many successful CPOE installations have been "home grown" by university hospitals and research institutions and perfected over many years of hard trial and error. Though they strongly believe that the electronic systems will prove far safer than relying on paper files, they worry that federal officials aren't doing enough to keep tabs on hundreds of tech companies aggressively marketing new versions of the complex software.

"These systems have lots of potential to improve safety but if they aren't implemented correctly they might worsen safety," said David Classen, an informatics professor at the University of Utah School of Medicine.

Classen points to his recent research testing CPOE systems  at 62 hospitals, which found that the systems caught medication errors only about half the time, including some that would have resulted in serious injuries and possible death. Systems from the same manufacturers performed better at some hospitals than others.

"These systems do fail," he said.

Alerts are 'a joke'

A number of studies have documented that CPOE can significantly reduce medication errors that stem from sloppy physician handwriting on prescriptions. Yet others have found that CPOE can also create new hazards. One of the earliest critical  studies was done by Ross Koppel, a University of Pennsylvania professor, who reported in 2005 that the systems can introduce a litany of errors. Koppel also found CPOE systems often flood doctors with warning alerts that are of no consequence, leading many physicians to habitually ignore them - a syndrome so commonplace it even has a name: alert fatigue.

The automated warnings aren't taken seriously. "They are a joke," Koppel told the Investigative Fund. He blames manufacturers for producing systems that rely on what he called "not ready for prime time software."

Others remain optimistic that the systems eventually will live up to their potential. Blumenthal said in an interview that CPOE alert and "decision support" features make doctors better, and he cited his own medical practice in Massachussetts. He said the computerized system helped him decide whether to order X-rays, and what type, based on a patient's symptoms entered into the computer. In some cases, the computer was able to locate results of a previous test, sparing the patient needless exposure to radiation.

"The interaction between me and the computer is emblematic of what's possible to accomplish," Blumenthal said.

Government officials note that phasing in CPOE is vital to achieving broad health reform goals. That view is shared by an influential coalition of consumer groups and labor unions. The coalition, which includes the older Americans' lobby AARP, argues that the systems promote safety and efficiency and will grant patients a greater say in their medical care.

Blumenthal said that CPOE is critical to the success of the electronic health records initiative. "We need to support it and make sure it happens," he said. "How fast and in what form remains to be seen."

Related Story » Amid Digital Surge, a Lack of Policing by FDA

As federal officials encourage the rapid expansion of electronic medical records to help doctors improve care and cut costs, they lack a reliable and systematic method for tracking the safety of these products, agency data and audits show.

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