Singularity Health Law Blog

AIRLINE MODEL IN HEALTH INSURER MERGER

Fueled to a large extent by the survival of the Affordable care Act in two United States Supreme Court challenges, and countless Congressional votes, the health insurance industry is set to further consolidate the major health insurance players from five to three as Anthem proposes to acquire Cigna for $48.3 billion dollars and Aetna seeks to acquire Humana for a mere $37 billion dollars. The argument is being made that consolidation in the health care insurance industry will help reduce costs and it is likely that it will.

 

SCOTUS AND OBAMACARE II: WINDS OF KATRINA

The Affordable Care Act as adopted contains 906 pages. It is a complex statute made necessarily so by industry and congressional efforts to block provisions that would have simplified it such as a move to a single payer option. To satisfy all of the various stakeholders including insurance and pharmaceutical companies and their minions, it became strategically necessary to make complex what would otherwise be simple by creating a system of state insurance exchanges and low income subsidies to increase enrollment.

The case of King v. Burwell pending in the Supreme Court of the United States is an effort to scuttle the Act by focusing on four words out of the 906 pages. Part of the changes to the tax code contained in the Act provides for a calculation of a tax credit that depends upon the number of months that the taxpayer has been enrolled in a health insurance plan purchased on an insurance exchange “established by the State.”

States, under the Act have the option to establish their own exchange or to rely on exchanges set up by the federal government. 34 states have opted to use the federal exchanges.  

The argument goes that if a state fails to set up its own exchange and relies on the federal default exchange those states have not utilized an exchange established by the State and therefore there can be no tax credits provided for those subsidized insureds living in the 34 federal option states. If successful, the plaintiffs in King will have engineered the loss of $29 Billion dollars in tax credits in those states impacting primarily poor and middle income people on subsidies.

 Interestingly, the proponents of the abrogation of the Act provide no specific alternatives for the federal government to deal with what appears likely to be the largest public service and human suffering disaster since Katrina.  In order for the Supreme Court to kill the Act on these grounds it would need to abandon any semblance of judicial restrain and proceed on strictly political grounds. The country be damned.

Federal exchanges adopted by a state in lieu of one created by the state is one established by the state in the context of the Act as a whole.

Digital Medicine - A LIFESAVER?

Robin Cook and Eric Topol had an interesting article in the Wall Street Journal today entitled “How Digital Medicine Will Soon Save Your Life.” They predict that digital medicine will arrive soon with “force of a hurricane. The promise of individualized “tailored” medicine’s advance with the prospect of cheap gene decoding, nanotechnology and smart phone’s playing the role of physician avatars, silently monitoring our body chemistry and organ functioning is certainly appealing and probably within the realm of near realization. They note the recent FDA approval of VISI, a device that monitors heart electricity, respiratory rate, blood oxygen, and blood pressure without a cuff and transmits the data to a medical office. They predict that the advent of digital medicine will democratize medicine permitting patients to own or control their medical data which they can transmit over the web. They see this as a shift away from the “medical - industrial complex.”

 

The authors see problems and unanticipated problems related to privacy, misuse of information and patients being overwhelmed by the information available to them. They suggest that the FDA will have to play a major role to ameliorate those issues. This is somewhat funny. The reality is that if the FDA plays a major role in this futuristic model it is far more likely to be the problem than the solution. It still clings to the 19th Century approach to approval of medicines that work for the majority, but not all of the public and to obstruct the access to drugs that work for a minority of patients, with appropriate molecular structures, but not for the majority.  To reach the great advances and lower costs that the author’s envision there will need to be a hurricane running through the FDA.

Peter W. Huber. The Cure in the Code.

Book Review: Peter W. Huber. The Cure in the Code: How 20th Century Law is undermining 21st Century Medicine.Basic Books (Nov. 2013).

Mr. Huber provides an intense guide to the exploding scientific developments in molecular medicine and the legal and regulatory impediments that threaten to cripple its promise of cheaper and more effective medicine through individualized treatment applications. Modern molecular and genomic advances in medicine, coupled with the exponential increases in computing power and attendant increase in algorithmic data analysis capability opens up the potential for great leaps in medical knowledge and treatment effectiveness.

Standing in the way, however, is the federal Food and Drug Administration with an antiquated system of approvals for new developments in medicine. Mr. Huber argues that the gold standard for FDA approval, the double blind based studies of broad effectiveness against a placebo, are too expensive, too time consuming, too unethical and too narrow. They are too narrow in the sense that they are too broad, requiring a demonstration of effectiveness in a large population, dealing with a specific medical issue, without focusing on the drugs applicability to specific molecular potential in individual cases.

The author refers to this as the “old magic bullet” model, with a single simple cause directly linked to a single effect. He asserts,

 

[A] high level of complex and statistically elusive biochemical diversity likewise makes it impossible to judge a drug’s efficacy or most of its potential side effects using a conventional, one dimensional statistical analysis of data in biochemically indiscriminate Trials.

 

Mr. Huber notes that the FDA relaxed the reins somewhat in dealing with the multi-virus issues inherent in HIV treatment, speeding drugs to market like AZT and the creation of “drug cocktails” for attacking the virus, when one drug alone was insufficient.  Since then, the FDA has retreated to a more regressive pattern of focus on testing large scale applications of individual drugs to broad populations rather than providing support for wider experimentation by doctors and patients based upon biomarkers and molecular diversity to generate the type of success and failure information that can provide meaningful advances in medical knowledge. The answer he suggests requires a radical reorientation of the FDA, with the focus of Baysean statistical analysis on a broad range of evidence.

 

CAN THE FDA REGULATE YOUR STEM CELLS?

In July, 2012, Rosemary N, Collyer, a United States District Court Judge for the District of Columbia, ruled that autologous stem cells re-injected into a person’ body following a acculturation of the cells with the use of another drug product shipped in interstate commerce is a “drug” subject to regulation by the U.S, Food and Drug Administration. The purpose of the re-injection is to stimulate the regrowth of bone, cartilage and other human tissue to regenerate them in lieu of joint transplants and other orthopedic surgical procedures.

 

CALIFORNIA GAY CURE LAW GOES TO APPEALS COURT

Last year California Governor Jerry Brown signed into law California SB 1172, which makes it illegal to provide “conversion” or “reparative” therapy to homosexuals under the  age of 18 in the state. The issue is whether this an unremarkable and rational exercise of the police power of the state or an infringement of First Amendment rights.   Supporters of the bill assert that the “antigay” therapy is worthless pseudoscience and has the potential of harming young homosexuals who are struggling with identity and self worth issues.  They claim that homosexuality is not a disease or an assumed condition, but an intrinsic or genetic positioning on a natural scale of human sexuality.

 

SCOTUS REELS IN “STATE ACTION” ANTITRUST IMMUNITY DEFENSE

The United States Supreme Court, in a unanimous opinion written Justice Sotomayor, overturned an Eleventh Circuit Court of Appeals and Georgia District Court finding “state action” antitrust immunity in the case of FTC v. Phoebe Putney Health System, Inc. et al, No. 11-1160. Had they ruled otherwise there would have opened a huge whole in the FTC’s ability to regulate anticompetitive conduct by state sub-entities under a general grant of state authority. Georgia like many states has a hospital authorities law that permits counties and or municipalities to create quasi governmental entities with broad grants of powers to operate health care facilities.

TROUBLING U.S. HEALTH CARE STATS.

The Institute of Medicine and the National Research Counsel announced the pre-publication release of their report on their recent comparison of health care data between the U.S. and 16 other countries which crosses all age categories. The other countries include Canada, Japan, Australia, Germany, Austria, Denmark, Finland, Norway, Portugal, Sweden, Switzerland, the Netherlands, the United Kingdom and Spain. This is a fascinating read entitled U.S. Health in International Perspective: Shorter Lives, Poorer Health is currently available to read on line for free at the National Academies Press website. The U.S. generally finished near the bottom in most categories for the population under the age of 75.  Our post 75 population, outscores their peers elsewhere. 

SCOTUS HEARS GEORGIA “STATE ACTION” ANTITRUST CASE

On November 26, 2012 the Supreme Court of the United States will hear an important antitrust case where an admittedly anticompetitive merger between two hospitals in Georgia was immunized against FTC action by  the application of the “state action” defense first promulgated under the precedent of Parker v. Brown, 317 U.S. 341 (1943)(the Sherman Act does not subject states to liability for anticompetitive conduct within their jurisdiction). Political subdivisions of the a state are not automatically protected by the Parker doctrine, but may under some circumstances be granted immunity if the state generally authorizes the challenged action and the state has a “clearly articulated policy authorizing anticompetitive conduct.

 

JUSTICE ROBERTS AND A BRIDGE TOO FAR

In holding with the minority liberal wing of the court that the Affordable Care Act is constitutional as a tax, Justice Roberts seems to have concluded that the wholesale sinking of the Act by the Supreme Court was “a bridge too far” for the conservative majority which stopped the vote recount in Florida before it was completed, effectively anointing George W. Bush President of the United States on legal grounds not used before or since. That of course brought us 2 middle east wars on a credit card that we are just beginning to pay and the worst financial crash since the Great Depression.