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         Clinical intelligence for supply chain leadership



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July 23, 2014   Download print version

Vanderbilt University Medical Center named Healthcare Purchasing News' 2014 Supply Chain Department of the Year

Health law subsidies upheld, conflicting with ruling hours earlier

Battery consensus standards for medical devices

Florida’s biggest health insurer signals rate hikes ahead

Former Texas hospital chief's fraud trial to begin

Alzheimer's disease fight focuses on preventive treatment, delaying onset by 5 years could greatly reduce the number of patients

Hospital sales of medical marijuana fraught with questions

Antiviral group: 'Biomedical' Tx could slow HIV


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Vanderbilt University Medical Center named Healthcare Purchasing News' 2014 Supply Chain Department of the Year

Healthcare Purchasing News named Nashville, TN-based Vanderbilt University Medical Center as the recipient of its 11th Annual Supply Chain Department of the Year Award. HPN, which provides clinical intelligence for supply chain leadership monthly in print and daily online, selected the multi-hospital system’s Supply Chain team for the strong bonds it forged with surgeons and other clinicians and clinical specialties, as well as the C-suite, en route to consolidating and centralizing operations and processes.

Under the leadership of Teresa Dail, R.N., Chief Supply Chain Officer, the Supply Chain team at Vanderbilt rallied to fuse a department previously split between the healthcare and university realms, developing and implementing strategic and tactical improvements that started from the ground up – solidifying the fundamentals before building on that foundation.

“First, it was critical that there be an integration of the supply chain with the clinical and operational leadership of the hospitals and clinics to be able to build relationships, trust and collaboration,” Dail told Healthcare Purchasing News. “Second, medical contracting and purchasing is completely different than what universities typically do. It is a very complex environment that requires different skill sets and focus.

“Benchmarks and metrics were established, dashboards were developed, standard operating procedures were put into place and accountability for success was shared amongst all team members working in supply chain, from the supply techs to the Chief Supply Chain Officer,” Dail added. “Today, we are a mature, talented, highly productive, clinically integrated team involved in every aspect of our organization. We have a very lean organizational structure that is centralized and responsible for supporting the entire clinical enterprise.”

Dail marveled at the “strong supportive and collaborative relationship” among Supply Chain team members and clinical and leadership team members, which typically results in average savings of $10 million to $15 million per year through analytics, information technology, utilization management and value analysis. Dail’s team also operates a full-service 50,000-square-foot off-site case cart center that incorporates central sterile processing and supply and third-party logistics capabilities for high-dollar procedural products in low units of measure.

"During a turbulent economic period spanning the last seven years, Vanderbilt’s Supply Chain team underwent a remarkable transformation that logically unified operations but also attracted and engaged surgeons and other clinical leaders to assume active roles in supply chain matters,” said HPN Senior Editor Rick Dana Barlow. “However the healthcare industry emerges from market reformation in the coming years, one definitive outcome tethered to costs and quality involves clinicians as willing and dedicated players in supply chain activities. Vanderbilt already is there.”

Vanderbilt’s Supply Chain team will be featured in HPN's August edition and distributed at the 2014 Annual Conference of the Association for Healthcare Resource & Materials Management (AHRMM) in Orlando. Visit HPN Online for the article.



Health law subsidies upheld, conflicting with ruling hours earlier

Two federal appeals court panels issued conflicting rulings Tuesday on whether the government could subsidize health insurance premiums for people in three dozen states that use the federal insurance exchange. The decisions are the latest in a series of legal challenges to central components of President Obama’s healthcare law.

The United States Court of Appeals for the Fourth Circuit, in Richmond, upheld the subsidies, saying that a rule issued by the Internal Revenue Service was “a permissible exercise of the agency’s discretion.”

The ruling came within hours of a 2-to-1 ruling by a panel of the United States Court of Appeals for the District of Columbia Circuit, which said that the government could not subsidize insurance for people in states that use the federal exchange.

That decision could cut potentially off financial assistance for more than 4.5 million people who were found eligible for subsidized insurance in the federal exchange, or marketplace.

Under the Affordable Care Act, the appeals court here said, subsidies are available only to people who obtained insurance through exchanges established by states. Visit the New York Times for the story.



Battery consensus standards for medical devices

UL (Underwriters Laboratories) has announced that the U.S. Food and Drug Administration (FDA) has recognized two UL battery safety standards as consensus standards for medical devices incorporating lithium or nickel-based batteries. The two standards are UL 2054 - Standard for Household and Commercial Batteries, and UL 1642 - Standard for Lithium Batteries (Cells).

Consensus standards are standards recognized by the FDA for use in evaluating medical devices before they are approved for market entry. The FDA's Center for Devices and Radiological Health (CDRH) believes that conformance with recognized consensus standards can support a reasonable assurance of safety and/or effectiveness for many applicable aspects of medical devices. In the case of medical devices using batteries, manufacturers can now use the proof of compliance with UL 2054 and UL 1642 as evidence of a device's safety and effectiveness.

According to Ibrahim Jilani, Battery Manager for UL's Consumer Technology Division, consensus standards are also a means to streamline the premarket review process. "The use of these recognized standards will not only help medical device manufacturers reduce regulatory obstacles to enter the U.S. and international markets but also help them satisfy FDA premarket review requirements."

Although certification is voluntary, UL anticipates this announcement will likely be a sizeable regulatory driver going forward whereby medical device manufacturers will look to have UL 2054 Compliant Nickel Cell Type(s), UL 1642 Compliant Lithium Cell Type(s), and/or UL 2054 Compliant Battery Pack(s).

For more information about UL's battery testing & certification, visit and/or for large format batteries.



Florida’s biggest health insurer signals rate hikes ahead

Florida Blue, the state’s dominant health insurer, snagged more than one in three consumers on the health law’s exchange this year, but many could face rate hikes as the carrier struggles with an influx of older and sicker enrollees, said the company’s top executive. Several factors could drive up rates next year — including a paucity of younger and healthy enrollees and a greater-than-expected surge in people seeking expensive health services, CEO Patrick Geraghty said in an interview.

The nonprofit Blue Cross and Blue Shield affiliate added 339,000 customers through the Affordable Care Act’s federal marketplace this year— or about 34 percent of the nearly 1 million who signed up in the state, Geraghty said.

Florida Blue would not reveal its proposed 2015 rates, which were submitted to state regulators last month. State officials are expected to disclose the rates for the nearly dozen carriers in the marketplace at the end of July. Open enrollment begins Nov. 15 and goes through Feb. 15.

To date, only two insurers have disclosed their 2015 rate proposals. Humana proposed an average 14.1 percent increase in two separate filings for its health maintenance organizations (HMOs), while its preferred provider organizations (PPO) have a 2.2 percent average rate increase. Molina has proposed an 11.6 percent average rate decrease for all its plans.

Florida Blue has been one of the nation’s most fiscally stable health insurers. In 2012, the latest year for which data is available, Florida Blue achieved its 24th consecutive profitable year, as the company made $217 million net income on about $9 billion in revenue. It has about 4 million customers in Florida across all lines of health insurance.

About 23 percent of those who bought exchange policies from Florida Blue this year were in the 18-to-34 age category, Geraghty said. That compares to 28 percent nationally. Initial federal projections were that 40 percent of enrollees nationally would be young adults. Geraghty said he knew the percentage of young adults signing up in Florida would be lower than the national average because of the state’s older population. Still, 23 percent was lower than the company projected.

It was also harder to sign up younger adults in Florida, he said, because they faced higher rates under the law’s requirement that the oldest person buying coverage pay no more than three times the rate paid by the youngest enrollee. Another factor that could lead to higher premiums in 2015 is that demand for expensive health services exceeded the insurer’s expectations, Geraghty said.

About 300,000 Florida Blue customers were given that option and 90 percent kept the grandfathered plans, Geraghty said.  Because they are healthier as a group than the broader market, the company underpriced its marketplace plans, he said.

Despite these challenges, Geraghty said he was generally pleased with the results of the exchange’s first year of enrollment.  The company had about 50 percent of the individual state insurance market in 2014, and today has about a 40 percent share, including people buying on and off the exchange. While losing some market share, the company gained many new members. Visit Kaiser Health News for the story.



Former Texas hospital chief's fraud trial to begin

TYLER, TX (AP) — Hospitals operated by a Dallas businessman improperly billed Medicare 80 percent of the time and continued the fraudulent billing even after being warned by government auditors, prosecutors contend in federal court records. Details of the prosecution's case against Dr. Tariq Mahmood were disclosed in the recent court filings. Mahmood's trial on charges of fraud conspiracy began Friday with jury selection and will continue this week in Tyler.

Federal indictments say he conspired to submit more than $1.1 million in false billings to enrich himself even as his hospitals in East Texas and elsewhere lacked funding to operate effectively, The Dallas Morning News reported.

Mahmood has pleaded not guilty to healthcare-billing fraud and aggravated identity theft counts. He faces more than two decades in prison if convicted on all 15 fraud counts. Mahmood's attorneys have sought in pretrial motions to block an audit from being used as evidence. They also want to omit details of his hospitals' poor conditions and his lifestyle — he owns a 10,000-square-foot gated estate and has been driven to court hearings in a Mercedes.

"When this evidence is coupled with witness testimony that the defendant was directing individuals to submit fraudulently changed codes, it proves the existence of the defendant's scheme to defraud Medicare," according to a motion filed by the U.S. attorney's office.

The trial marks the first major proceeding in a series of criminal and civil legal actions against Mahmood and his former hospital chain. At least eight government agencies have been drawn into investigations of financial mismanagement and patient care at Mahmood's facilities. His six rural hospitals are now closed or struggling under new ownership, the newspaper reported. The fraud case against Mahmood focuses on billings at three hospitals: Renaissance Hospital Terrell, Cozby Germany Hospital in Grand Saline and Central Texas Hospital in Cameron.

A former administrator for Renaissance, Edwina Henry, told authorities that in 2008 she witnessed Mahmood opening charts of other doctors' patients and writing in them. She told investigators she thought they were fraudulent entries aimed at boosting hospital billing revenue. Visit the Sacramento Bee for the story.



Alzheimer's disease fight focuses on preventive treatment, delaying onset by 5 years could greatly reduce the number of patients

"Earlier is better" has become a mantra in the field of Alzheimer's disease. Experts are targeting the prevention or delay of memory decline more, instead of just focusing on treating patients who have the disease.

Results from one of the largest randomized prevention trial to date presented Sunday here at the Alzheimer's Association International Conference suggest why scientists are thinking this way. The trial found that intervention involving exercise, diet and other behavioral changes significantly improved overall cognitive functioning in patients after two years, compared with patients in a control group.

The trial known as Finger and conducted in Finland, is only one of roughly 25 such studies under way, experts say. More are set to begin, examining different preventive strategies in cognitively normal people or those exhibiting mild memory problems who are at high risk for developing dementia.

Some focus on lifestyle activities and others on medications to slow or stop the ravages of the disease on brain tissue and neurons.

The largest involve thousands of participants and cost tens if not hundreds of millions of dollars funded by combination of the government, private foundations and pharmaceutical companies. The latest partnership is expected to be announced Tuesday, with Novartis AG providing significant funding to the Banner Alzheimer's Institute in Phoenix for a prevention trial starting next year likely to cost over $100 million. The National Institutes of Health is also providing over $30 million for the study.

The number of Alzheimer's sufferers in the U.S. is expected to roughly triple between 2010 and 2050, growing to 13.5 million in 2050 from 5.1 million in 2010. If the disease could be delayed by just five years, the number of people with Alzheimer's at age 65 in 2050 could be reduced by nearly six million people, according to a report published by the Alzheimer's Association in 2010.

Globally, one-third of Alzheimer's disease is related to risk factors that can be potentially changed, such as lack of education and exercise, according to a study published in the journal Lancet Neurology.

"Forestalling the appearance of symptoms by five to 10 years would have a tremendous public health impact and essentially would allow people to live the rest of their lives without real symptoms," says Laurie Ryan, chief of the Dementias of Aging branch at the National Institute on Aging.

Prevention efforts are receiving more attention and financial backing in the field because of growing recognition in recent years that disease-related changes in the brain begin decades before memory problems become obvious. Treating patients once the symptoms begin may be too late to make a major impact on the disease, as demonstrated by the failure of several highly anticipated experimental treatments in recent years.

Also, a greater ability to measure the progression of the disease in the brain through the use of biological markers, such as the imaging of disease-related proteins, has made it easier to detect the subtle and slow progression of the disease in live humans. Before these biomarker tests, Alzheimer's was diagnosed solely based on clinical symptoms. (It often still is.) Its pathology in the brain could only be examined with autopsy.

And recent data from Eli Lilly & Co.'s clinical trial of its experimental compound solanezumab showed that though the compound failed overall to improve cognition in people with Alzheimer's, there was evidence that participants with more mild symptoms of the disease did benefit.

The Finger trial randomly assigned 1,260 people ages 60 to 77. Some went to a control group and were given basic health advice. Others underwent an intervention that incorporated diet and exercise, cognitive training, social activities and control of physical risk factors like high blood pressure and cholesterol. After two years, those in the intervention group had significantly improved performance on different memory measures compared with the control group, according to Miia Kivipelto, a professor of clinical geriatric epidemiology at Karolinska Institutet in Stockholm, who presented the work. The participants will continue to be followed for seven years.

One Banner study expected to begin in 2015 and take nine years to complete will focus on 1,300 cognitively normal people with mutations in the ApoE4 gene, which put them at higher risk of the disease, and test two different anti-amyloid drugs, Pierre Tariot, director of the Banner Alzheimer's Institute, says.

There's also the 5,800-participant Tommorrow study, funded by Takeda Pharmaceutical Co. and Zinfandel Pharmaceuticals Inc., to examine whether a diabetes drugs called pioglitazone may delay symptoms in the next five years in people at high risk as predicted by a combination of age and a gene called TOMM40, who are cognitively normal. Visit the Wall Street Journal for the article.



Hospital sales of medical marijuana fraught with questions

A dangerous neighborhood. The threat of arrest, or worse. An unreliable product, sold by criminals. For seriously ill patients who rely on medical marijuana to ease their pain, paying for their treatment can be a “risky operation,” according to multiple sclerosis patient Julie Falco.

But if officials at Swedish Covenant Hospital get their way, medical marijuana users like Falco could one day purchase their cannabis at a hospital dispensary — just like a patient buying a dosed antibiotic or a powerful pain reliever at the hospital’s pharmacy.

“We have professionals who very much would like to prescribe those drugs, we have the system in place to manage it and we have the patient population that needs it,” said Marcia Jimenez, the hospital’s director of intergovernmental affairs. “It just made a lot of sense.”

Swedish Covenant wants to be the first Illinois hospital to take advantage of the state’s decision last year to legalize medical marijuana — a decision that’s likely to trigger a marijuana “Gold Rush.”

The state has agreed to issue 60 permits to sell the drug — 13 of which will be in Chicago. Swedish Covenant would like to grab one of them but is hamstrung by federal law, which still treats all marijuana as illegal.

“If the hospital were to become a dispensary at this point, we would be violating the federal law and jeopardizing reimbursements for Medicare and Medicaid,” said Jimenez, who is calling for Congress to catch up with the growing number of states allowing medical marijuana.

As it stands, hospital bosses are concerned they could also be targeted for criminal activity or find themselves in trouble with the IRS.

“It’s not something the hospital could risk and still stay financially viable,” Jimenez said. “So we’re outspoken about it. We think hospitals are the best choice for dispensing. Unless someone speaks up, we’re not going to be able to change the federal law.”

So far, no hospital in the 23 states or Washington, D.C., where medical pot is legal, has sold marijuana, said Chris Lindsey, a legislative analyst for the Marijuana Policy Project.

Some Chicago hospitals said they’re working out how to deal with patients who use marijuana as medicine, but dispensary plans aren’t in the works.

At Swedish Covenant, Jeffrey Cilley, an oncologist, said doctors are interested in using medical pot for their cancer patients to help them deal with symptoms like pain, nausea and anxiety.

Falco, the multiple sclerosis patient who uses marijuana to help with uncontrollable leg spasms and other symptoms, said that reasoning makes sense. “Having hospitals involved with this is certainly a plus because it’s evoking a safer situation for patients to go where they’re frequenting already,” said the 49-year-old from Ravenswood.

Swedish Covenant’s boss, Mark Newton, acknowledged marijuana is a money-making opportunity. Visit the Chicago Sun-Times for the article.



Antiviral group: 'Biomedical' Tx could slow HIV

Nearly all people living with HIV could be rendered noninfectious by a suite of "biomedical interventions," according to new recommendations for HIV prevention. Similarly, people at risk for HIV now have biomedical options that can reduce their risk of acquiring the disease, according to the International Antiviral Society-USA (IAS-USA).

It's the first time the IAS-USA has issued recommendations for HIV prevention in clinical care settings. The new guidelines are twinned with its usual recommendations -- updated every 2 years -- for the treatment of HIV. "After more than 30 years, we are at a potential turning point in the control of the global HIV epidemic," the recommendations concluded.

Clinicians, using evidence-based HIV prevention tools, are crucial in implementing these new interventions, the guidelines panel said. Both guidelines are based on a systematic review of HIV literature, either published or presented at scientific conferences, with recommendations arrived at by consensus among panel members.

In line with current recommendations from the CDC, the panel urged that all adults and adolescents should be offered HIV testing at least once. People at higher than average risk of HIV -- either because of risky behavior or residence in a region with a high prevalence of the virus -- should be tested more often "at intervals appropriate to the individual's situation," the panel recommended.

To direct that need for additional testing, clinicians from time to time should assess risk, such as sexual and drug-use activities, the panel urged.

Patients must be informed of the testing, the panel noted, and the right to refuse must be honored, but through pretest counseling "clinicians should ensure that refusals are informed decisions."

For people with HIV, the first step is to offer antiretroviral therapy as soon as the virus is diagnosed -- a recommendation that is echoed by the treatment guidelines.

Both guidelines panels urge therapy for all patients with HIV, for its individual medical benefits and because accumulating evidence shows that people with fully suppressed virus are almost completely noninfectious.

The prevention panel said that clinicians should educate patients about both the personal and the public benefits of therapy and should assess patients' "readiness to initiate and adhere" to long-term treatment. They should also develop strategies to support adherence, tailored to the individual patient. In addition, clinicians should be aware that acute HIV infection has a nonspecific presentation and "urgently pursue" specific diagnostics, such as a plasma HIV viral load, if there's a suspicion of infection.

HIV-positive injection drug users need access, simultaneously, to ART, needle and syringe exchange programs, supervised injection sites, medicalized heroin, and medically assisted therapy, including opioid-substitution therapy, the panel said.

The panel also urged physicians to "actively" link patients to care as soon as possible after a diagnosis. It also urged a range of supports to keep people in care, including such things as "patient health navigation, community and peer outreach, (and) provision of culturally appropriate print media."

For people not infected with HIV, the panel recommendations noted that there are medical interventions that can reduce the risk of acquiring the virus, including ART and PrEP.

Physicians should perform a risk assessment to decide the focus of risk reduction counseling and services, the panel recommended. Also, for those at high risk of catching HIV, risk reduction interventions and services are "warranted, especially for individuals and couples who seek repeat HIV testing to monitor seroconversion."

Daily PrEP, with the single pill combination emtricitabine/tenofovir (Truvada), should be offered to those at high risk based either on a background HIV incidence of greater than 2% or a recent diagnosis of a sexually transmitted infection.

Aside from its recommendation to offer ART to all newly diagnosed patients, the prevention panel also modified its recommendations on which initial treatments to offer, how often to monitor treatment, and how to care for treatment-experienced patients. The therapy should be started as soon as possible and preferably within 2 weeks of diagnosis for those with opportunistic infections, the panel recommended. For the full report visit the Journal of the American Medical Association.