City Orders Labs to Submit Data From Tests of Diabetics

As part of a broad new effort to better understand how diabetics manage their illness, the New York City Board of Health is ordering laboratories to pass along detailed information on individual tests that measure blood sugar levels to the city’s health department.

It is the first such reporting and tracking effort in the country, and it is being closely watched by public health officials nationwide wrestling with ways to better control the epidemic of diabetes.

An estimated 520,000 adult New Yorkers have been diagnosed with diabetes, according to the health department. It is thought that an additional 265,000 New Yorkers have diabetes, but do not know it. It was the fourth-leading cause of death in the city in 2003, the first time it made it into the top five.

Diabetics must control their blood sugar levels to prevent serious complications from the disease. The city wants the laboratories to report information from what are known as A1c tests, which are more detailed than the daily blood sugar tests patients perform on themselves. In the A1c tests, which diabetics are supposed to have done two to four times a year, a doctor is able to measure the average amount of glucose in the blood over a period of months.

By gathering data on the tests, the city hopes to coordinate intervention programs. Within six months, officials hope to use the information to reach out to local doctors and, in some cases, patients, to urge lifestyle changes and other measures to better control the disease.

“We’re confident that this measure will help people with diabetes live longer and healthier lives,” said Dr. Thomas R. Frieden, the city health commissioner.

While laboratories have long been required to pass along patient information on infectious diseases like hepatitis, this is the first time public health officials are trying to use similar techniques to control a chronic disease.

However, some critics of the effort worry that it is an invasion of patient privacy, especially since people will not be given the chance to opt out of having their information collected. There is also a fear that the information could find its way into the hands of insurance providers, who could, in turn, use it to discriminate against patients.

“I am shocked and dismayed to hear this news about A1c blood test results being given to the health department without patient knowledge or consent,” said Robin Kaigh, a New York lawyer who has tracked medical privacy issues. She added, “In addition, this landmark step will cause other databases of sensitive patient information or disease registries to be seriously contemplated in the future.”

In response to such concerns, Dr. Frieden said, “The utmost care will be taken to keep this information secure and confidential while we work toward improving patient care.”

The health department, whose board voted unanimously yesterday to begin the program, hopes to collect data on at least 90 percent of those diagnosed with diabetes.

If the effort is successful, the department would collect and analyze data on roughly 500,000 patients, which would require a massive commitment of time and resources.

While many laboratories already have electronic filing systems that would make it easy for them to pass along the information, the city expects to finance the added cost of compiling the data, estimated at $1 million a year. It hopes to get more money for intervention programs through a combination of private and federal sources.

Wal-Mart Memo Suggests Ways to Cut Employee Benefit Costs

An internal memo sent to Wal-Mart’s board of directors proposes numerous ways to hold down spending on health care and other benefits while seeking to minimize damage to the retailer’s reputation. Among the recommendations are hiring more part-time workers and discouraging unhealthy people from working at Wal-Mart.
In the memorandum, M. Susan Chambers, Wal-Mart’s executive vice president for benefits, also recommends reducing 401(k) contributions and wooing younger, and presumably healthier, workers by offering education benefits. The memo voices concern that workers with seven years’ seniority earn more than workers with one year’s seniority, but are no more productive.
To discourage unhealthy job applicants, Ms. Chambers suggests that Wal-Mart arrange for “all jobs to include some physical activity (e.g., all cashiers do some cart-gathering).”
The memo acknowledged that Wal-Mart, the world’s largest retailer, had to walk a fine line in restraining benefit costs because critics had attacked it for being stingy on wages and health coverage. Ms. Chambers acknowledged that 46 percent of the children of Wal-Mart’s 1.33 million United States employees were uninsured or on Medicaid.
Wal-Mart executives said the memo was part of an effort to rein in benefit costs, which to Wall Street’s dismay have soared by 15 percent a year on average since 2002. Like much of corporate America, Wal-Mart has been squeezed by soaring health costs. The proposed plan, if approved, would save the company more than $1 billion a year by 2011.
In an interview, Ms. Chambers said she was focusing not on cutting costs, but on serving employees better by giving them more choices on their benefits.
“We are investing in our benefits that will take even better care of our associates,” she said. “Our benefit plan is known today as being generous.”
Ms. Chambers also said that she made her recommendations after surveying employees about how they felt about the benefits plan. “This is not about cutting,” she said. “This is about redirecting savings to another part of their benefit plans.”
One proposal would reduce the amount of time, from two years to one, that part-time employees would have to wait before qualifying for health insurance. Another would put health clinics in stores, in part to reduce expensive employee visits to emergency rooms. Wal-Mart’s benefit costs jumped to $4.2 billion last year, from $2.8 billion three years earlier, causing concern within the company because benefits represented an increasing share of sales. Last year, Wal-Mart earned $10.5 billion on sales of $285 billion.
A draft memo to Wal-Mart’s board was obtained from Wal-Mart Watch, a nonprofit group, allied with labor unions, that asserts that Wal-Mart’s pay and benefits are too low. Tracy Sefl, a spokeswoman for Wal-Mart Watch, said someone mailed the document anonymously to her group last month. When asked about the memo, Wal-Mart officials made available the updated copy that actually went to the board.
Under fire because less than 45 percent of its workers receive company health insurance, Wal-Mart announced a new plan on Monday that seeks to increase participation by allowing some employees to pay just $11 a month in premiums. Some health experts praised the plan for making coverage more affordable, but others criticized it, noting that full-time Wal-Mart employees, who earn on average around $17,500 a year, could face out-of-pocket expenses of $2,500 a year or more.
Eager to burnish Wal-Mart’s image as it faces opposition in trying to expand into New York, Chicago and Los Angeles, Wal-Mart’s chief executive, H. Lee Scott Jr., also announced on Monday a sweeping plan to conserve energy. He also said that Wal-Mart supported raising the minimum wage to help Wal-Mart’s customers.
The theme throughout the memo was how to slow the increase in benefit costs without giving more ammunition to critics who contend that Wal-Mart’s wages and benefits are dragging down those of other American workers.
Ms. Chambers proposed that employees pay more for their spouses’ health insurance. She called for cutting 401(k) contributions to 3 percent of wages from 4 percent and cutting company-paid life insurance policies to $12,000 from the current level, equal to an employee’s annual earnings.
Life insurance, she said, was “a high-satisfaction, low-importance benefit, which suggests an opportunity to trim the offering without substantial impact on associate satisfaction.” Wal-Mart refers to its employees as associates.
Acknowledging that Wal-Mart has image problems, Ms. Chambers wrote: “Wal-Mart’s critics can easily exploit some aspects of our benefits offering to make their case; in other words, our critics are correct in some of their observations. Specifically, our coverage is expensive for low-income families, and Wal-Mart has a significant percentage of associates and their children on public assistance.”
Her memo stated that 5 percent of Wal-Mart’s workers were on Medicaid, compared with 4 percent for other national employers. She said that Wal-Mart spent $1.5 billion a year on health insurance, which amounts to $2,660 per insured worker.
The memo, prepared with the help of McKinsey & Company, said the board was to consider the recommendations in November. But the memo said that three top Wal-Mart officials – its chief financial officer, its top human relations executive and its executive vice president for legal and corporate affairs – had “received the recommendations enthusiastically.”
Ms. Chambers’s memo voiced concern that workers were staying with the company longer, pushing up wage costs, although she stopped short of calling for efforts to push out more senior workers.
She wrote that “the cost of an associate with seven years of tenure is almost 55 percent more than the cost of an associate with one year of tenure, yet there is no difference in his or her productivity. Moreover, because we pay an associate more in salary and benefits as his or her tenure increases, we are pricing that associate out of the labor market, increasing the likelihood that he or she will stay with Wal-Mart.”
The memo noted that Wal-Mart workers “are getting sicker than the national population, particularly in obesity-related diseases,” including diabetes and coronary artery disease. The memo said Wal-Mart workers tended to overuse emergency rooms and underuse prescriptions and doctor visits, perhaps from previous experience with Medicaid.
The memo noted, “The least healthy, least productive associates are more satisfied with their benefits than other segments and are interested in longer careers with Wal-Mart.”
The memo proposed incorporating physical activity in all jobs and promoting health savings accounts. Such accounts are financed with pretax dollars and allow workers to divert their contributions into retirement savings if they are not all spent on health care. Health experts say these accounts will be more attractive to younger, healthier workers.
“It will be far easier to attract and retain a healthier work force than it will be to change behavior in an existing one,” the memo said. “These moves would also dissuade unhealthy people from coming to work at Wal-Mart.”
Ron Pollack, executive director of Families U.S.A., a health care consumer-advocacy group, criticized the memo for recommending that more workers move into health plans with high deductibles.
“Their people are paying a very substantial portion of their earnings out of pocket for health care,” he said. “These plans will cause these workers and their families to defer or refrain from getting needed care.”
The memo noted that 38 percent of Wal-Mart workers spent more than one-sixth of their Wal-Mart income on health care last year.
By reducing the amount of time part-timers must work to qualify for health insurance, Wal-Mart is hoping to allay some of its critics.
One proposal under consideration would offer new employees “limited funding” so they could “gain access to the private insurance market” after 30 days of employment while waiting to join Wal-Mart’s plan.
Such assistance, the memo stated, “would give us a powerful set of messages to use in combating critics. (For instance, ‘Wal-Mart offers associates access to health insurance after they’ve worked with us for just 30 days.’)”
Steven Greenhouse reported from New York for this article, and Michael Barbaro from Bentonville, Ark.

Medicare Law Prompts a Rush for Lobbyists

The new Medicare law has touched off explosive growth in lobbying by the health care industry, whose spending on advocacy here far exceeds that of consumer groups and other industries like defense and banking.
Almost every week the federal government issues new rules or guidelines to carry out the 2003 law, which provides a drug benefit starting in January. To keep track of the new rules and to decipher their meaning is a full-time job for hundreds of lawyers and lobbyists, who regularly seek changes advantageous to their clients.
With hundreds of billions of dollars at stake, health care providers, insurers, drug makers and pharmacies are continually trying to influence rules for the drug benefit and other initiatives authorized by the law.
“You see a real surge in health care lobbying because that’s where the money is,” said Frederick H. Graefe, a lobbyist for hospitals and makers of medical equipment. “Twenty years ago the defense industry was dominant and had the most lobbyists, the big players. Now it’s health care.”
Last year alone, the health care industry spent $325 million – more than any other sector – in its efforts to influence Congress and federal agencies, according to Political Money Line, a nonpartisan group that studies reports filed with Congress by lobbyists and their clients.
Drug companies led the way. They reported spending $86.9 million on lobbying last year, followed by hospitals with $55 million and doctors with $35.4 million.
Lobbying Congress nowadays often means persuading lawmakers to make telephone calls to Bush administration officials on behalf of clients concerned about specific issues, like the Medicare payment for a drug or a medical device.
The pinpoint focus of much lobbying is illustrated by the case of Lexapro, an antidepressant made by Forest Laboratories. The Bush administration has said that Medicare drug plans must cover “substantially all” antidepressants, but not necessarily Lexapro, a drug widely prescribed for depression and anxiety among older adults. Claudia Schlosberg, a lawyer with Blank Rome who represents Forest Laboratories, has been pressing Medicare officials to reverse that decision and has obtained letters from several members of Congress supporting the company’s position in favor of covering Lexapro.
“Every health care interest has a voice on Capitol Hill,” said Elizabeth J. Fowler, a lawyer who recently left the Democratic staff of the Senate Finance Committee to join a consulting firm. “What you lose in the process is consumer and beneficiary voices. We heard a lot more from industry interests than from beneficiaries.”
Chris Jennings, who became a lobbyist after serving as health policy coordinator for President Bill Clinton, said: “The proliferation of health care lobbyists produces specialization. The broader good is often lost as people focus on next year’s Medicare reimbursement rate for a specific group of health care providers, or a regulation to be issued next month.”
The health care industry is subject to pervasive federal regulation, and the government sets prices for many goods and services provided to the elderly under Medicare. But the Bush administration and the Republican majority in Congress are receptive to advice from the industry, including private insurers who will deliver the drug benefit.
“The success of the new Medicare law depends on a robust partnership between government and the private sector,” said Stacey Hughes, a partner in the lobbying firm established by former Senator Don Nickles, Republican of Oklahoma.
Health policy experts and officials said the growth of health care lobbying reflected several trends:
¶Congress earmarks more and more money each year for specific hospitals, medical schools and health care projects. Health care providers and local officials have a better chance to obtain such largess if they retain lobbyists to plump for their projects on Capitol Hill.
¶Lobbying has become more substantive. To buttress their arguments, lobbyists need data, cost estimates and economic analyses of health policy proposals. They retain expert consultants to prepare such reports.
¶Lobbyists have adopted many techniques of political campaigns. They hire pollsters and buy advertising to sway public opinion and pressure Congress.
¶Many lobbyists have carved a niche for themselves by focusing on one party, one house of Congress, one Congressional committee or a handful of influential lawmakers.
Carol A. McDaid, a health care lobbyist at Capitol Decisions, a subsidiary of the Van Scoyoc Companies, said, “It’s become so sophisticated that, in preparation for a critical vote, a big health care or pharmaceutical company will hire a different firm to lobby each key member of an important committee, like the Ways and Means Committee.”
The Pharmaceutical Research and Manufacturers of America reported spending $15.5 million on lobbying last year, while two of its members, Pfizer and Bristol-Myers Squibb, spent $5.6 million apiece and Johnson & Johnson spent $4.5 million.
Other heavyweight lobbies included the American Medical Association, which spent $18.5 million last year, and America’s Health Insurance Plans, which spent $5.6 million, about the same amount as the Blue Cross and Blue Shield Association.
By contrast, AARP, the lobby for older Americans, spent $8 million. The American Cancer Society spent $2.6 million, the American Heart Association spent $1 million and Families USA, the liberal group that calls itself a voice for health care consumers, reported spending $40,000.
Alan B. Mertz, president of the American Clinical Laboratory Association, said the advocacy budget for his group had more than tripled, to $2.5 million this year from $750,000 in 2002. “We had to beef up our advocacy to deal with threats to our Medicare reimbursement,” Mr. Mertz said, noting that Medicare payments for laboratory tests had been frozen through 2008.
Lobbyists said it made sense for their clients to pour money into lobbying because so much money was at stake. Health care accounts for more than 15 percent of the nation’s economy, and private insurers often look to Medicare as a guide in deciding what services to cover and how much to pay.
Moreover, the federal role is growing. Medicare and Medicaid will account for 37 percent of all spending on prescription drugs next year, up from 20 percent this year, said Stephen Heffler, an economist at the federal Centers for Medicare and Medicaid Services.
The Bush administration and the Congressional Budget Office say Medicare will spend more than $1 trillion on prescription drugs in the next 10 years, with outlays topping $100 billion a year after 2009.
Two linguistic changes show how health care lobbyists have emerged as a potent force. Lobbyists and trade associations, once seen as special interests, are now called “stakeholders,” with a legitimate claim to be heard in the policy-making process.
“Expanding coverage” used to mean providing health insurance to people who had none. But lobbyists now use the term in a different sense. When they speak of “coverage expansions,” they mean that Medicare should cover, or pay for, new technology like PET scans, implantable defibrillators and drug-coated stents to treat clogged arteries.
Political campaign contributions are frequently coordinated with lobbying campaigns. Lobbyists often hold fund-raisers at the request of members of Congress, as allowed by campaign finance laws. They are expected to contribute money from their own pockets and to raise money from clients.
“You increase your influence and access by doing fund-raisers,” said James C. Pyles, a lawyer and lobbyist for psychoanalysts and home care agencies. “If you’re not on the donor list, you don’t have much access.”
Ms. McDaid, who lobbies for hospitals and ambulance companies, said: “In the old days, the requests for political giving went mainly to your clients’ political action committees. Now health care lobbyists have to tithe personally. The bigger your client base, the more pressure there is to give. It’s not unusual for a lobbyist at a big firm to give $25,000 to $50,000 in personal contributions to Congressional candidates in a two-year election cycle.”
The growing prominence of health care issues on the national agenda has created an unquenchable demand for lobbyists. New issues include bioterrorism, stem cells, health information technology, the privacy of medical records, television advertising of prescription drugs and the importing of drugs from Canada.
Republicans are in demand at lobbying firms and trade associations, but so are knowledgeable Democrats.
John E. McManus, who formed his own lobbying firm after working for Republican members of the House Ways and Means Committee, received a total of $620,000 last year from the American Medical Association, the Advanced Medical Technology Association, the Pharmaceutical Research and Manufacturers of America and several drug companies, including Merck and Genentech. Mr. McManus can help them navigate the new Medicare law because, as a Congressional aide, he helped write it.
On the other side of the political spectrum, David H. Nexon, a health policy adviser to Senator Edward M. Kennedy for more than two decades, stepped down in February to become senior executive vice president of the Advanced Medical Technology Association, the lobby for makers of medical devices like Medtronic and Guidant.
Charles M. Brain, director of legislative affairs for President Clinton, reported that he got $240,000 last year for representing the Pharmaceutical Research and Manufacturers of America. Stephen J. Ricchetti, deputy chief of staff in the Clinton White House, lobbies for Eli Lilly & Company, Novartis and Pfizer.
Richard J. Pollack, executive vice president of the American Hospital Association, said health lobbying had become more partisan.
“We hire Republicans to lobby Republican members of Congress and Democrats to work Democratic offices,” Mr. Pollack said.
The Generic Pharmaceutical Association has retained Mr. Jennings and Mark W. Isakowitz to lobby for legislation to increase the use of generic drugs. As a White House aide, Mr. Jennings helped devise the Clinton plan for universal health insurance. As a lobbyist at the National Federation of Independent Business, Mr. Isakowitz, a Republican, helped defeat the Clinton plan.
As the costs of Medicare and Medicaid soar, federal prosecutors and members of Congress are investigating fraud and abuse with new zeal. Many health care companies find they need more lawyers and lobbyists to cope.
In a recent advertisement recruiting lawyers for its Washington office, Sidley Austin Brown & Wood, one of the nation’s largest law firms, said its health care practice had “experienced tremendous growth.”