BB&T National Editor

"Quality" has been the watchword over the past half-dozen years in discussing healthcare reform during the George W. Bush presidency, with the broad assumption that providing improved patient care would move healthcare to better providers.

The Federal Trade Commission (FTC) is going to explore that assumption with two public workshops later this year. The workshops will examine the impact of quality on competition and on consumers. Specifically, the meetings, the commission said, will look "healthcare competition and consumer protection" in two broad areas: the development of an abbreviated regulatory pathway for "follow-on" biologic drugs, and a consideration of how quality information may impact competition among healthcare providers and influence consumers.

Michael Wroblewski, an attorney in the FTC's bureau of competition, told Biomedical Business & Technology that a key focus by the commission will be "the competitive significance of quality information — can it move the market?"

Wroblewski also pointed to a key concern for the FTC: that "you want to make sure that quality information that's there isn't false and misleading, so that consumers don't make the wrong quality decisions." He said that he expected more interest and participation in the workshops from industry rather than consumers, while noting that the "consumer" category should be considered as including physicians, hospitals and other buyers of healthcare services, not just patients.

The need for the workshops, the FTC said, stems from questions raised by a joint 2004 report by the commission and the Department of Justice. That report, "Improving Health Care: A Dose of Competition," it said, identified the significant increase in competitive issues as related to consumer protection, thus playing into the FTC's roles in these areas. The meetings also will build on the commission's Workshop on Innovations in Health Care Delivery held earlier this year, focused, it said, on "healthcare price and quality transparency," including "forms of transparency that may be anticompetitive," such as disclosure of payer/provider contract rates that could foster "coordinated pricing."

The FTC said it will consider whether providers delivering high-quality services "are rewarded with more business (and/or greater revenue) and whether those failing to do so either improve or are penalized with less business (and/or lower revenue)."

On the biologics side, the meetings will be concerned with those drugs "sufficiently similar to an approved or referenced biologic product to permit the follow-on applicant to rely on existing scientific knowledge about the safety and effectiveness of the referenced biologic product to obtain approval of the follow-on product."

Among the key issues is whether an abbreviated regulatory approval pathway for these products will be the need to strike the right balance between "regulatory exclusivity periods and competition to spur the development of new, improved, and follow-on biologic drug products" in other words, whether the same protections and incentives covering the development of generic pharmaceuticals should be adopted for follow-on biologics.

Grassley wants CMS 'underestimation' answers

Sen. Chuck Grassley (R-Iowa) has sent a letter to Kerry Weems, acting administrator of the Centers for Medicare & Medicaid Services (CMS), demanding "full accounting" of how the agency underestimated the extent of improper Medicare payments for durable medical equipment (DME).

Daniel Levinson, inspector general of the Department of Health and Human Services (HHS), last month released an audit that found that Medicare officials underestimated the amount of incorrect payments for DME in 2006 and that the miscalculation was caused by the agency's failure to have auditors follow CMS' policy for checking claims. CMS had estimated a payment error rate of 7.5% — about $700 million — in improper payments.

However, the HHS audit found an "error rate" of nearly 29% for a sample of DME claims. The report cited 20 payment errors identified by the Medicare audit and 73 errors the contractor had not identified.

In his letter, Grassley said that the report highlights flaws in Medicare auditing and raises questions about the program's efforts to identify and reduce waste. And he called on Levinson to conduct a follow-up review of Medicare's 2007 payment error rate because of irregularities in the 2006 audit. He also wants to identify which Medicare officials told outside auditors to "deviate" from federal policy in the 2006 audit.

"This is unconscionable and an affront to every American taxpayer who is footing the bill," Grassley said in the letter, "[W]e are talking billions of dollars lost to fraud, waste and/or abuse in 2006."

Plastics: new role in neural implants?

Plastics are pervasive in healthcare, and Jessica Winter, assistant professor of chemical and biomolecular engineering at Ohio State University (OSU; Columbus) described still another potential opportunity for the use of for plastics in medical devices at the recent meeting of the American Chemical Society (Washington) last month in Philadelphia.

Worldwide, researchers are developing neural implants that stimulate neurons to treat conditions caused by neural damage from Parkinson's disease to macular degeneration — and Winter said that plastic coatings could be used to encourage neurons in the body to grow and connect with the electrodes which provide treatment. Most research focuses on preventing the body from rejecting such implants, but the OSU researchers are looking instead at how to boost the effectiveness of these implants.

Winter and her colleagues are infusing water-soluble polymers with neurotrophins, proteins that help neurons grow and survive. "We're trying to get the nerve tissue to integrate with a device," she said, "to grow into it to form a better connection."

The researchers are combining different polymers, some shaped like tiny spheres and fibers, to create composite coatings that release neurotrophins in a steady dose over time.

The coatings also give nerves a scaffold to cling to as they grow around an implant. The researchers coated two kinds of electrodes — one, a flat electrode used in retinal implants, and the other a cylindrical electrode array used in deep brain stimulation. The first is being used in experimental treatments for macular degeneration, while the second holds promise for suppressing tremors in people who have Parkinson's disease.

The first coating they developed was made of polyethylene glycol-polylactic acid (PEGPLA) — a polymer often used in medical implants. They placed the PEGPLA-coated electrodes in an array of cell cultures and measured how long the coating dispensed the neurotrophins, and how the cells responded.

They tested the retinal implants with retinal cells taken from rabbits, and the deep brain electrodes with PC12 cells — cells that grow into neurons — which were taken from cancer tissue in rats. In both cases, neurons grew from the cells and extended toward the electrodes.

Ideally, Winter said, the coatings would release neurotrophins for up to three months, since that's the length of time that nerves in the body require to heal after implant surgery. Using only PEGPLA, they found that the implant would release neurotrophins for three weeks.

The researchers are now combining it with two other biodegradable polymers: polylactic co-glycol acid (PLGA) microspheres and polycaprolactone (PCL) polyester nanofibers. In this scheme, one polymer releases an initial burst of the chemical, then another polymer begins its release, and then another.

"To get long-term release, we think these multi-component systems are the way to go," Winter said. "We can control the release by combining the materials in different ways, and we're confident that we can extend the release time further — even to 90 days."

Group to push cell phones into HIT

The Medical Records Institute (Boston) has formed the Center for Cell Phone Applications in Healthcare (C-PAHC), with the stated intention of pushing the broad use of cell phones in the healthcare arena and to provide information concerning how this technology can be used as a critical med-tech asset. C-PAHC describes cell phones as "the future conduit of interoperability for essential health information."

Peter Waegemann, CEO of Medical Records Institute and executive director of C-PAHC, predicts broad global integration of cell phones into healthcare in about five years. "Hundreds, maybe thousands of applications are just coming out," he told BB&T, with C-PAHC having identified 115 to 125 specific applications in a variety of categories for healthcare. "People in various clinics and hospitals are already using cell phones. We're just at the very beginning."

Offering one example that fits with the Medical Record Institute's mission for expansion of electronic medical record (EMR) use, he described how a doctor or clinic could access a patient's EMR information from a cell phone message, making this detail available at a clinic or hospital even before the patient arrives. This parallels, he said, the way some first-responders already have moved from paper records to cell phones to phone ahead key information to an emergency room for immediate treatment of the injured.

While the developed world can boast of its communication infrastructure, Waegemann said that, a bit ironically, "most of the activities" in cell phone/healthcare IT use may come in less-developed countries because such countries will be able to move ahead faster "without having to go through legacy systems."

He added: "Development of software will come from many countries; no one knows where the leading company will come from. C-PAHC will identify applications for which solutions are currently developed and available, as well as those under development.

C-PAHC plans to hold a variety of meetings and a developers' workshop, the latter to be hosted in conjunction with the 2009 TEPR+ Conference, Feb. 1-5, 2009, in Palm Springs, California. TEPR for Towards the Electronic Patient Record is a conference that aids healthcare executives in developing ways to implement HIT.

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