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July 28, 2015   Download print version

The Hutchins Center explains The Medicare Trustees Report

Getting chemotherapy near the end can actually make life worse

FDA mulls expansion of diagnostic test oversight

U.S. oncologists decry high cost of cancer drugs

Breast cancer mortality risk can be reduced by 2 generic drugs

Amerinet members to benefit from new agreement with Medline for adult incontinence products


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August 2015

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The Hutchins Center explains The Medicare Trustees Report

The trustees of Medicare, four government officials and two private citizens, issue detailed annual reports on the current and projected finances of the Medicare health insurance program for the elderly and disabled. The report, which looks 75 years into the future, incorporates the latest thinking of actuaries on trends in Medicare spending.

What's new in the July 2015 report? Not much in the near term. The Trustees did make some technical adjustments to their long-run model that lowered projected Medicare spending, but these adjustments only affect the projections from 2041 on. By 2088, this adjustment amounts to a bit less than 1 percent of GDP.

Medicare spending is projected to rise from 3.5 percent of GDP in 2014 to 4.3 percent in 2024, with the increase mostly attributable to increased enrollment as the baby boom generation turns 65.

Adjusted for inflation, spending per beneficiary rises an average of just 2% per year—about the same pace as per capita GDP growth—as reimbursement cuts under the Affordable Care Act (ACA) continue to restrain spending.

In the longer run, the Trustees project Medicare spending to increase sharply as a share of the economy, rising from 3.5 percent of GDP in 2014 to 6 percent by 2089. The rise in spending between 2014 and 2035 is largely driven by increased enrollment. From 2036 to 2089, spending is projected to rise primarily due to growing per-beneficiary costs.

The Trustees have dramatically lowered their projections of long-run Medicare expenditure growth. In 2009, for example, the Trustees projected that Medicare spending would reach 11.2 percent of GDP by 2080—compared with just 6 percent in this year's report. The change in the spending outlook is attributable to the effects of the ACA on provider reimbursements and a much slower rate of increase in actual Medicare expenditures since 2009. Excess cost growth in Medicare—the difference in the growth rates of per beneficiary spending and per capita GDP—is now expected to be quite low relative to historical averages.

The Trustees believe that, unless the healthcare sector manages to become much more productive over time, these payments will be too low to ensure that Medicare beneficiaries continue to have good access to healthcare providers. As a result, they hypothesize that future Congresses might choose to override them. Under this alternative, Medicare spending rises to 9.6% percent of GDP, about 50% higher than in the baseline scenario.

The Trustees and CBO have similar projections for spending over the next ten years, but they have very different methodologies for projecting Medicare spending growth in the long run. In particular, the Trustees assume that Medicare spending will rise more slowly than private health expenditures, while CBO assumes that Medicare spending will rise more rapidly. As a result, their projections diverge sharply as the horizon is extended, with CBO projecting Medicare expenditures to be more than twice as high as a share of GDP by 2089. Visit Brookings for the report.



Getting chemotherapy near the end can actually make life worse

A new study finds that, at least in cancer, there's a very real medical reason to consider giving less treatment at the end of life: chemotherapy doesn't improve dying patients' quality of life. In fact, for those terminal cancer patients who were doing the best at the beginning of the study and were least disabled by their cancer, receiving chemotherapy was associated with worse quality of life near death.

"For oncologists, the default seems to be if a patient can tolerate another chemotherapy regimen, there’s a perception or the conventional wisdom is there is no harm in trying," said Holly Prigerson, director of the Center for Research on End-of-Life Care at Weill Cornell Medical College. "The power of this analysis is it's one of the first, I believe, to demonstrate there are harms."

The study, published in JAMA Oncology, examined the cases of 312 people with progressive cancers that had spread and followed them until their deaths. The chemotherapy administered at this stage was palliative, and the study did not find any difference in survival.

Researchers found that half of the patients were receiving chemotherapies at the beginning of the study, on average within four months of dying. Their quality of life in their last week was assessed by a caregiver. Most striking, for the nine patients who were doing well, asymptomatic at the start of the study, all received chemotherapy, and most had a lower quality of life in their last days.

The American Society for Clinical Oncology guidelines recommend palliative chemotherapy only for patients with solid tumors who are performing well, not disabled by their cancer.

In an accompanying editorial, two physicians from the Oregon Health and Science University wrote that there are only two reasons to give a patient chemotherapy, which can be time-consuming, expensive, and have side effects: it should either extend their lives or make their lives better. The new study, they write, brings "troubling" data to one of the most difficult problems in cancer treatment. It also challenges one of the biggest prevailing ideas about cancer: the analogy to a battle.

The study suggests "that equating treatment with hope is inappropriate," Charles Blanke and Erik Fromme wrote. "Even when oncologists communicate clearly about prognosis and are honest about the limitations of treatment, many patients feel immense pressure to continue treatment. Patients with end-stage cancer are encouraged by friends and family to keep fighting, but the battle analogy itself can portray the dying patient as a loser and should be discouraged." Visit the Washington Post for the article.



FDA mulls expansion of diagnostic test oversight

At a time when physicians are complaining about the coming "tsunami" of regulations they'll have to follow for quality reporting and electronic health records, federal officials are considering increasing regulations in another area: laboratory-developed tests.

LDTs, as they are known, refer to tests that are developed and used only at a specific laboratory -- for example, a test for erythrocyte sedimentation rate that a hospital lab might use. And in a growing number of cases, LDT's also involve genetic tests that purport to predict, say, a woman's risk of getting breast or ovarian cancer -- tests that are used only by the company marketing them and that are not sent out to independent labs or consumers as test kits.

However, the regulations have met with considerable opposition, including from the American Medical Association (AMA) as well as from purveyors of LDTs.

Currently, LDTs are regulated by the Centers for Medicare and Medicaid Services (CMS) under a law known as the Clinical Laboratory Improvement Amendments of 1988, or CLIA. CLIA regulates the tests' "analytic validity," Rachel Sachs, JD, an academic fellow at Harvard Law School in Boston, explained at the school's "Health Law Year in P/Review" conference last January.

"The basic question is whether the test finds what it's supposed to find," Sachs explained. "If you have a BRCA test, and [the test manufacturer] says, 'Our diagnostic test detects the presence or absence of the following 50 mutations,' CLIA ensures that statement is accurate."

However, she continued, "CLIA provides essentially no information about clinical validity, which is about the relationship between the test's target and the presence or absence of a clinical condition. So a woman might know she has a mutation in BRCA gene, but CLIA doesn't tell her how much that mutation changes her risk of developing breast cancer."

CLIA uses recognized accrediting bodies such as the College of American Pathologists (CAP) to accredit the labs, explained Lakshman Ramamurthy, PhD, a director at Avalere, a healthcare consulting firm in Washington. "The way CAP does it, it asks a lab to send them one or two proficiency testing samples every year. If a proficiency test comes up as erroneous, [the lab] gets a do-over." It's a much less rigorous process than the one FDA uses to approve a test, he said.

The FDA's role in regulating LDTs, however, is unclear. Since the passage of the Medical Device Amendments in 1976, that agency has been exercising "discretionary authority" over LDTs -- meaning that although it has the right to regulate them, for the most part it has left them alone.

But that may be changing. Last October, the agency issued a draft framework for regulating LDTs. In the framework, the agency said it was concerned that although CLIA regulation helps ensure "that laboratories and their personnel maintain standards of high quality, FDA is concerned that compliance with CLIA regulations alone does not ensure that the diagnostic devices themselves are safe and effective."

The agency said it was also concerned "that under the current policy of enforcement discretion, there is no post-market safety monitoring of serious adverse events associated with the use of LDTs," and that "LDTs that have not undergone rigorous analytical or clinical review are used without the knowledge of the patient or the treating physician that the device being used is not FDA cleared or approved."

Under the draft framework, the FDA would provide a low level of oversight for LDTs that are considered Class I -- those that have the lowest risk for problems. Makers of those LDTs would be required to register and list them with the FDA, and report any adverse events. LDTs for rare diseases and those that meet unmet medical needs -- cases where no FDA-approved test is available -- would also fall into this category.

High-risk tests -- such as tests for determining the safety or efficacy of blood products -- would, on the other hand, be subject to premarket FDA review in addition to registration and adverse event reporting. Moderate-risk devices also would have premarket review, but that requirement wouldn't kick in for 5 years after the guidance is finalized. Also, while the FDA itself would review high-risk tests, it would contract with third parties to conduct the reviews for moderate-risk tests.

The AMA is also not a fan of the FDA's proposal. The group "hold[s] that the FDA proposed guidance to regulate laboratory developed testing services is not authorized by law," the association wrote in a June 19th letter to members of the House Energy and Commerce Committee, which was considering adding laboratory regulation provisions to the 21st Century Cures Act.

The FDA's proposed guidance "is based on the misunderstanding that physician services and procedures rendered in a single laboratory to a specific patient are equivalent to the use of commercial packaged kits engineered and manufactured by a company for a standard patient and shipped around the nation," the AMA's letter continued. "Services provided to a patient by a physician do not share the same risks as a commercial kit."

The College of American Pathologists, on the other hand, seems to take a more nuanced approach. In its own proposal for regulating LDTs, the college suggests "A tiered risk-based regulation that would focus FDA oversight to the tests that currently have the least transparency and highest potential patient risk."

The proposal also suggests "Definition of a regulatory process for modified LDTs with significant modifications to report high-risk tests to the FDA and for moderate- or low-risk to CMS." Visit MedPage Today for the article.



U.S. oncologists decry high cost of cancer drugs

"High cancer-drug prices are affecting the care of patients with cancer and our health care system," Dr. Ayalew Tefferi, a hematologist at Mayo Clinic in Rochester, MN, said in a Mayo news release.

Tefferi and his colleagues made a number of recommendations on how to address the problem in a commentary published in the Mayo Clinic Proceedings.

Allowing Medicare to negotiate drug prices is one of the suggestions the team of 118 leading cancer experts offered as a possible solution. Along with their recommendations, the group also expressed support for a patient-based grassroots movement on that is demanding action on the issue.

"The average gross household income in the U.S. is about $52,000 per year. For an insured patient with cancer who needs a drug that costs $120,000 per year, the out-of-pocket expenses could be as much as $25,000 to $30,000 -- more than half their average household income," Tefferi explained in the news release.

A study published earlier this year in the Journal of Economic Perspectives found that cancer drug prices have increased an average of $8,500 a year over the past 15 years.

The changes the commentary called for included:

·         Create a review mechanism after a drug has been approved by the U.S. Food and Drug Administration that would propose a fair price for new cancer drugs that is based on the value to patients and healthcare.

·         Allow the Patient-Centered Outcomes Research Institute -- established under the Affordable Care Act -- to evaluate the benefits of new cancer therapies, and let similar organizations include drug prices in their assessments of a treatment's value.

·         Permit patients to import cancer drugs from other countries. For example, prices in Canada are about half that of prices in the United States, the experts said.

·         Pass legislation to prevent drug companies from delaying the introduction of generic drugs, and reform the patent system to make it more difficult to unnecessarily extend patent protection of a drug.

·         Encourage groups that represent cancer specialists and patients to consider the overall value of drugs and treatments when developing their treatment guidelines.

The group wrote that "it should be possible to focus the attention of pharmaceutical companies on this problem and to encourage our elected representatives to more effectively advocate for the interests of their most important constituents among the stakeholders in cancer -- American cancer patients." (HealthDay) Visit NIH for the study.



Breast cancer mortality risk can be reduced by 2 generic drugs

Two generic drugs can help cut the rate of breast cancer deaths in postmenopausal women, according to two studies published in the Lancet journal. The researchers also said that these drugs, aromatase inhibitors and bisphosphonates, can be used together to enhance their benefits and reduce certain side effects.

Aromatase inhibitors (AIs) are hormone-suppressing drugs prescribed to women with postmenopausal breast and ovarian cancer, while bisphosphonates are used to treat osteoporosis. 

The results of the two studies were announced by the Early Breast Cancer Trialists' Collaborative Group, a worldwide collaboration formed by the University of Oxford in England to collect the findings of randomized trials of early breast cancer treatment.

The first study conducted by the Institute of Cancer Research, UK, and the Royal Marsden NHS Foundation Trust in England analyzed data from 30,000 post-menopausal women who participated in nine randomized trials.

The findings showed that intake of AIs for five years reduced the risk of the cancer recurring by about a third, and the risk of dying from breast cancer by about 15 percent through the decade after the start of the treatment. The researchers stated that mortality rates associated with breast cancer would reduce by 40 percent over 10 years after beginning the treatment.

The second study, also conducted by the Institute of Cancer Research, found that bisphosphonates increased chances of survival among breast cancer patients if taken for two years to five years after the onset of the disease. For the study, researchers combined data from 18,766 women from 26 clinical trials. The study team stated that as breast cancer mostly spreads to the bone, following a bisphosphonates treatment could result in a 17 percent reduction in the recurrence of cancer.

According to the researchers, among post-menopausal women, bisphosphonate treatment showed an 18 percent decline in breast cancer deaths in the first decade after diagnosis. The researchers, however, noted that bisphosphonate has little effect in premenopausal women. Visit the International Business Times for the article.



Amerinet members to benefit from new agreement with Medline for adult incontinence products

ST LOUIS – Amerinet Inc. announces a new agreement for adult incontinence products with Medline Industries, Inc.

Through this agreement, Amerinet member hospitals will receive negotiated pricing on Medline’s incontinence products, including the FitRight line of protective underwear, briefs and guards. Medline is committed to offering a wide range of products made in the U.S. that promote individualized care and cost-effective outcomes.

This contract is currently effective through April 30, 2018.

Medline is a global manufacturer and distributor serving the healthcare industry with medical supplies and clinical solutions that help customers achieve both clinical and financial success. Headquartered in Mundelein, IL, the company offers 350,000+ medical devices and support services through more than 1,200 direct sales representatives who are dedicated points of contact for customers across the continuum of care.  For more information on Medline, go to or to connect with Medline on its social media channels.