DHMH Daily News Clippings
Thursday, September 9, 2004
News Clipping Archives
 
 
Shortage of Nursing Instructors Reaching 'Crisis' Level, Health Officials Say (Capital News Service)
Schools struggle to find nurses (Prince George’s Gazette)
Positions in medical malpractice debate changing (Prince George’s Gazette)
Agency provides free emergency starter kits (Prince George’s Gazette)
Health officials continue probe into MTBE water contamination (Carroll County Times)
Stalled hospital plans await revival (Hagerstown Herald-Mail)
Health matters (Daily Record)
Oversized backpacks a health concern for students (Annapolis Capital)
Some agencies fall short on keeping records (Carroll County Times)
State agencies improve PIA request response rate (Carroll County Times)
Virus crashes computers at some county offices (Annapolis Capital)
Journals Insist Drug Manufacturers Register All Trials (Washington Post)
Antibiotic increases sudden-death risk (Baltimore Sun)
How Drug Giant Keeps a Monopoly On 60-Year-Old Pill (Wall Street Journal)
US Health Care Premiums Jump 11.2% (Wall Street Journal)
Air pollution found to hinder children's lung development (Baltimore Sun)
Need for Home Defibrillators Questioned (Washington Post)
Omega-3 Foods Can Put Benefits on Label, FDA Says  (Washington Post)
Health Savings Accounts Gain Momentum (Wall Street Journal)
 
 

 
Shortage of Nursing Instructors Reaching 'Crisis' Level, Health Officials Say
 
By Linda Nishida
Capital News Service
Thursday, September 9, 2004
 
WASHINGTON - Qualified nursing students are being turned away because of a lack of teachers to train them, a situation that the dean of the University of Maryland's nursing school called a national "public health crisis" Wednesday.
 
Dr. Janet Allan told a congressional briefing that only half of the qualified applicants to bachelor-degree nursing programs in Maryland were admitted last year, because there were not enough teachers.
 
"The faculty shortage is very real. It's a growing crisis," said Allan, who moderated the briefing sponsored by Senator Barbara Mikulski, D-Md., and the group Americans for Nursing Shortage Relief. "It's almost tragic that even five years ago, we couldn't fill our classrooms."
 
She said after the briefing that the University of Maryland School of Nursing has "these fabulous students, and we have to turn them away."
 
Allan said an informal survey of the state's nursing schools by the university found that 2,800 qualified applicants for associate- and bachelor-degree nursing programs were denied admission last year. The numbers were based on responses from eight nursing programs in the state: the University of Maryland, Johns Hopkins University, Coppin State University, Villa Julie College, Bowie State University, Towson University, Salisbury University and Columbia Union College.
 
Five of those eight cited a faculty shortage as the main reason they rejected qualified candidates.
 
Nationally, 20 percent of nursing schools say they need more faculty members, according to a report cited by the National League of Nursing.
 
Allan said that nearly 16,000 qualified nursing school applicants were rejected nationwide last year, prospective students who might have gone on to help address problems such as 7 percent increases in "failure to rescue" cases and in patient mortality rates in recent years.
 
She said the main thing needed is money.
 
"If you're in a public institution in this country, your budget has been cut. My budget has been cut," Allan said. "If I had money, I'd find the faculty to hire."
 
She added that fresh recruiting efforts and a more creative curriculum are also necessary to encourage nurses and nursing students to consider teaching.
 
It can be a tough sell. Shannon McClellan, senior adviser to the dean, noted that salaries for new nursing teachers hover between $40,000 and $45,000 a year, about $20,000 less than the average salary of a nurse practitioner in Maryland. She said other deterrents, such as heavy workloads and rigorous license requirements for faculty, prevent would-be nurses from entering the field.
 
Other schools in the state are feeling the effects. Sharon Bernier, director of the nursing program at Montgomery College in Takoma Park, said that she is working to double the size of the college's nursing program, which she would be glad to do, if she had the faculty -- and the money.
 
"Salaries seemed to be the driving factor for people we interviewed whom we offered positions to," she said.
 
Her school was only able to admit 64 of the 270 qualified applicants it had last year.
 
"The faculty shortage in the state of Maryland . . . is acute for all of the programs," she said. "And we have all these applicants."
 
Copyright © 2001, 2002, and 2003 University of Maryland Philip Merrill College of Journalism
 
 

 
Schools struggle to find nurses
 
By Angela Swinson Lee
Prince George’s Gazette Staff Writer
Thursday, September 9, 2004
 
More than two dozen county schools are without a nurse, because of a large number of nursing vacancies in the school system. Now supervisors are asking administrators for help in attracting them to Prince George's County.
 
For the entire school year last year, the school system had a vacancy for a nursing supervisor. The position is difficult to fill, because most qualified applicants may have to take a $30,000 pay cut.
 
To work in the school system as a nursing supervisory, usually the starting salary is $40,299 and pay rates can go up to $67,472.
 
Meanwhile, administrators are considering increasing the pay rates in an effort to attract more nurses to county school health rooms, officials said.
 
Low pay and a shortage of nurses nationwide continues to be a factor in the lack of healthcare professionals in county schools, where 25 schools were without a nurse as of Tuesday.
 
"That number could change as I speak," said Carole Pinckney, the school system's supervisor of healthcare services. Nurses constantly resign, she said.
 
More than 200 nursing positions exist in the county's 198 schools.
 
At special centers, sometimes two or three nurses are required.
 
"If the offices of health services were a person, she would be in the critical care unit on life support," Judy Tribby, health services coordinator told the school board on Aug. 26. "We have eight nurse applications on file in our office and we are lucky to hire half of the nurses we interview."
 
Tribby said administrators find it especially difficult to attract a nurse manager with the 2 percent pay raise proposed for members of the Association of Supervisory and Administrative School Personnel. The nurse manager or supervisor would be a member of that union.
 
"We won't attract qualified nurse managers with master's degrees with a 2 percent increase," Tribby said.
 
According to Salary.com, the median salary for a registered nurse in the Washington, D.C., area is $57,275. The median salary in the region is even higher for nursing supervisors.
 
Tribby also criticized school officials for failing to properly recruit for the positions. She cited a lack of advertisements in local newspapers and a nurse trade publication.
 
Starting salaries for a licensed practical nurse in the school system is $13.89 per hour and it goes up to $25.54 per hour. Registered nurses have a starting salary of $16.86 per hour and the salary reaches $30.88, said Howard Burnett, the school system's chief administrator for human resources. Talks are underway to increase the salaries, Burnett said.
 
In an effort to substitute for permanent nurses, the school system's health services department gave crash-course training to medication assistants in each school -- often a teacher or principal designated to respond to student ailments.
 
Burnett said it is common for educators, particularly principals, to have to take on other responsibilities that can include dealing with sick children. "Talk to any principal, they will tell you it's 'other duties as assigned,' " he said.
 
The school system also has nurse substitutes and works with nursing agencies to find replacements.
 
But nursing administrators are asking for help. They are searching for ways to attract quality nursing professionals to county schools. Union leaders sent letters to county officials telling them of the problem. They also held a meeting with Frederick Corder, the county health officer.
 
The problem with vacancies, Pinckney said, is they affect the care given to students.
 
"We have medically fragile students in the schools that require nursing care," Pinckney said. Some students require proper care for tubal feeds, diabetes, ventilators, tracheotomies and other medical problems. "Some require nursing intervention during the school day," she said.
 
Schools that house students with serious medical problems become the priorities for new hires, Pinckney told The Gazette.
 
Aside from the low salary, the responsibility heaped upon nurses by schools could intimidate some candidates, Pinckney said,.
 
"I think one of the biggest challenges is that it's an individual practice. You're the only health professional in the school setting," she said.
 
Nursing shortages in the school system is nothing new to the county. Pinckney has been with the school system since 1992 and she does not recall a time when there were no vacancies.
 
Burnett said nurses typically come to the school system when they no longer want the hours and routine of a hospital or doctor's office. "They come to us in a different type of setting," he said.
 
Burnett said it is competition from other venues that causes the county to have a nursing shortage.
 
"We do have to improve the competitiveness of that group," said Burnett.
 
Pinckney said she is hopeful that all vacancies can be filled this year.
 
"There're a lot of people that really like school nursing. It's great working with kids. It really is," she said.
 
Copyright © 2004 The Gazette
 
 

 
Positions in medical malpractice debate changing
 
By Catherine Dolinski
Prince George’s Gazette Staff Writer
Thursday, September 9, 2004
 
ANNAPOLIS -- During a recent tour through Montgomery County, Gov. Robert L. Ehrlich Jr. urged reporters covering the policy debate over medical malpractice not to get lost in talk of caps on jury awards for pain and suffering.
 
"The cap gets to be shorthand in the press; they talk about the cap, the cap, the cap," Ehrlich (R) said during a meeting with Gazette reporters and editors on Aug. 24. "Well, the cap is one tort provision among many."
 
He appears to be on to something.
 
"Comprehensive solution" has emerged as the catch phrase du jour in the medical malpractice debate, and fresh proposals on all sides seem to indicate it is more than just talk.
 
Doctors and hospitals have even said that they could live without new caps on noneconomic damages -- the controversial centerpiece of their proposal that failed during the 2004 legislative session.
 
But while the terms of the discussion may be changing, they are no less contentious. In exchange for surrendering the caps, the medical community will demand alternatives that may be at least as polarizing, leaving the arbiters of the debate, once again, to piece together an increasingly complex puzzle.
 
Doctors continue to argue that increases in the size of malpractice awards are driving up their insurance rates and threaten to drive them out of business, especially in high-risk specialties such as obstetrics, where annual premiums can exceed $100,000.
 
The Maryland Insurance Administration is considering whether to approve a 41 percent rate increase requested by the Medical Mutual Liability Insurance Society of Maryland, the state's largest medical malpractice liability insurer.
 
Not only are some doctors talking about early retirement, Ehrlich said, others have told him privately that they are considering a strike -- making a special session on medical malpractice issues all the more critical.
 
But the governor has said repeatedly that a special session is possible only if a compromise with the legislature can be reached first. In reality, that boils down to compromise with Senate President Thomas V. Mike Miller Jr. (D-Dist. 27) of Chesapeake Beach, a trial lawyer and a skeptic on tort reform.
 
"I am a little more optimistic today than I was [in July]," Ehrlich said, praising Miller for recognizing the situation as a "crisis."
 
Meetings with Miller and Senate Judicial Proceedings Chairman Brian E. Frosh (D-Dist. 16) of Bethesda, whose committee killed Ehrlich's tort reform bill this spring, have gone well, the governor said, convincing him that chances for a special session on malpractice are increasing.
 
If that is the case, the menu of options from which to build a consensus is broadening.
 
Open to suggestions
 
Some doctors are looking at medical malpractice laws through a different lens, questioning whether it could be revised into a "no-fault" system. With the help of Barry F. Rosen, a Baltimore attorney who specializes in health care law, the doctors are putting together a plan to rewrite the medical malpractice tort to resemble the state's workers compensation system. Doctors say that change would lower the size of awards and attorney's fees, while giving patients more access to the system.
 
On the business side, the Greater Washington Area Board of Trade has taken the patient safety route, lobbying legislators on a proposal to create an electronic database of medical records. The secure-access database, spokesman Len N. Foxwell said, would improve patient care while lowering liability risks for doctors.
 
Ehrlich, meanwhile, is voicing tacit interest in a plan he initially panned, but that Miller and all of the stakeholders in the debate seem to like: having the state subsidize malpractice payouts in exchange for an agreement from liability insurers to freeze their rates.
 
The sticking point, Ehrlich said, will be the funding source, which will have to be something or someone other than Maryland taxpayers. Among the alternative sources that have been floated are bonds and a tax on HMO premiums, all ideas that remain in the table, he said.
 
"It's not a panacea," he said, although it could be a quick fix while the quest for a long-term solution continues.
 
But the biggest about-face has occurred in the medical community, with some of its members saying they would abandon their campaign to lower the existing $650,000 cap on noneconomic damages.
 
Gimmes
 
At an Aug. 25 meeting of the Senate medical malpractice task force, Pegeen Townsend, lobbyist for the Association of Maryland Hospitals and Health Systems, testified that reining in economic damages -- awards for lost wages and medical expenses -- is the top priority for hospitals.
 
Economic damages figured in the medical malpractice debate during this year's legislative session and were included in the governor's bill but did not receive the same attention as pain and suffering awards. Malpractice awards for medical expenses are based on what a doctor bills. But that is not normally what Medicare, Medicaid or a medical insurance company agrees to pay on a patient's behalf, Townsend said.
 
"We'd like to put into the calculation how much is actually paid," she said, adding that hospitals also want to see lost wages calculated with taxes taken into account, since jury awards are not subject to taxes.
 
Denise Matricciani, vice president of government affairs for the hospital association, said later that her group is serious about pursuing a multifaceted approach. It might drop its request for higher caps on pain and suffering, she said, if the legislature would grant its request on economic damages.
 
Trial lawyers were quick to dismiss the offer.
 
Sen. Sharon M. Grosfeld (D-Dist. 18) of Kensington, an attorney who sits on the Senate task force, said it is unfair to allow doctors or hospitals to profit from a contract between patients and insurance companies, to whom they pay premiums.
 
"Somebody who suffers should be compensated to the fullest extent of their loss," she said. "The doctors have to do a better job of going after the federal government and the insurance companies for appropriate reimbursements."
 
Frosh said there may be room for an economic damage component to the solution, but said it remains problematic to base compensation for medical costs purely on what is actually paid vs. what is billed.
 
"If you're a poor person and don't have health insurance, you've actually paid nothing in medical expenses," he said. "You have a $50,000 bill, but you haven't paid a dime yet because you don't have it."
 
The state medical society followed the hospital association's lead. After testifying before the Senate commission, MedChi lobbyist Joseph A. Schwartz III said that he, too, would consider dropping his campaign for noneconomic damage caps -- especially if the plaintiffs' attorneys would cap their fees instead.
 
"It's very important," he said, blaming the high cut that plaintiffs attorneys take -- about 40 percent -- on their fee-splitting agreements with other attorneys who refer the clients. "They need that extra 20 percent to give to the referring attorneys who do late-night TV ads."
 
Medical professionals' willingness to rethink the noneconomic damage caps may stem from revelations from Medical Mutual that such a reform would not solve the problem on its own.
 
"If you talk to Med Mutual, they'll tell you that even a significant diminution of the cap does not result in a significant impact on premium increases," Ehrlich said.
 
He added, however, that any discussion of capping attorneys' fees is obviously a nonstarter in the General Assembly.
 
Predictably, attorneys rejected Schwartz's idea out of hand. Grosfeld called the proposal a form of socialism, and asked whether the doctors and insurers would agree to cap fees for defense attorneys as well. Otherwise, she said, the system of legal representation will be seriously out of balance.
 
Still other approaches floated through the task force meeting, such as increasing the use of arbitrators to resolve health claims and beefing up oversight of hospitals and doctors.
 
If anything, the problem is at least as complex as before, Frosh said. But he agreed with the governor that a special session ought to be possible.
 
"I think we can come up with legislation that will have a short-term impact through immediate relief, and come up with a package likely to have a long-term solution," he said. "The solution is likely to encompass all of the areas."
 
Copyright © 2004 The Gazette
 
 

 
Agency provides free emergency starter kits
 
By Sonsyrea Tate
Prince George’s Gazette Staff Writer
Thursday, September 9, 2004
 
Not long ago, raised terror alerts and news reports about potential terrorist attacks prompted individuals to stock up on water, duct tape, and non-perishable foods.
 
Home emergency stashes have since been eaten, and residents simply are not living with stockpiles of emergency food and water or keeping fresh batteries and checking flashlights.
 
"I think as we get farther away from major events, there is a tendency to become desensitized," said Dr. Frederick J. Corder, director of the county Department of Health.
 
To reinvigorate residents' diligence about emergency preparedness, health officers will tour the county Saturday from 10 a.m. to 2 p.m. distributing emergency starter kits as a kick-off of an emergency preparedness campaign called Pack, Plan, and Practice. The campaign kick-off coincides with the anniversary of the 2001 terrorist attacks at the Pentagon and the World Trade Center.
 
The emergency starter kits will include a durable bag for emergency essentials, a detailed brochure with wallet cards, a preparedness checklist and a reminder refrigerator magnet.
 
"We think there's definitely room for improvement and that's why we put this program together," said Corder.
 
"We want to bring the concept of preparedness a lot more to the forefront. We do know that we live in a highly vulnerable area, so what we did was put together a checklist to help people become prepared."
 
Pack, Plan, Practice is designed to heighten awareness about the importance of planning for emergencies and help the county's more than 800,000 residents prepare for natural disasters, inclement weather and terrorist incidents.
 
Officials will raise awareness about the campaign through advertising in newspapers and outreach in the county's public schools.
 
Corder will be at various sites on Saturday to hand out emergency starter kits and answer questions.
 
"Emergency events can happen at any time, but we can increase our ability to cope by planning ahead," said Corder. "Pack, Plan, Practice breaks down emergency preparedness into manageable step-by-step instructions, and gives residents tools and tips to accomplish the steps."
 
Copyright © 2004 The Gazette
 
 

 
Health officials continue probe into MTBE water contamination
 
By Justin Palk
Carroll County Times Staff Writer
Wednesday, September 8, 2004
 
Carroll County's Health Department and the Maryland Department of the Environment are continuing to investigate the cause and scope of an incident of MTBE contamination outside of Hampstead, according to government representatives.
 
The Health Department is nearing the end of a program of testing intended to define the area surrounding Hillcrest Avenue that is affected by the contamination, said Charles Zeleski, acting director of the county's Bureau of Environmental Health.
 
MDE recommends that action be taken to treat MTBE contamination when tests show that it is present in concentrations above 20 parts per billion, said Richard McIntire, the department's spokesman. This is an aesthetic guideline, as 20 ppb is approximately the level at which people can detect the chemical's presence by smell or taste.
 
Methyl tertiary-butyl ether has been used as a gasoline additive since 1979 to help cars burn fuel more cleanly and efficiently, according to the Environmental Protection Agency's Web site. The EPA's Office of Water has not been able to determine what sort of health risks can be caused by exposure to low doses of MTBE, but in high doses, it has the potential to cause cancer.
 
Nine homes have received water filters from MDE to treat the contamination, and other homes have registered some contamination, mostly below 10 ppb, Zeleski said. It isn't clear at the moment whether this is the result of a single MTBE spill, or several.
 
MDE is investigating several possible sources for the contamination, including a nearby Tevis Oil facility, a private residence with an underground fuel storage tank and old gas stations, McIntire said.
 
Hampstead town officials have requested a meeting with the MDE to discuss the situation, but the department has not yet decided whether to do so, he said.
 
Copyright © 2004 Carroll County Times
 
 

 
Stalled hospital plans await revival
 
By Gregory T. Simmons
Hagerstown Herald-Mail
Thursday, September 9, 2004
 
Plans to build a new Washington County Hospital have remained on the shelf for nearly four months, although the reason no action has been taken on them remains a point of dispute.
 
The plans that Washington County Health System officials have been pushing for nearly two years would move the hospital from East Antietam Street to a new building off Robinwood Drive.
 
The Maryland Health Care Commission must approve the health system's application for a certificate of need, which would allow the health system to raise patient rates to pay for the construction.
 
The City of Hagerstown must extend water and sewer service to the proposed site.
 
The hospital will have to obtain a zoning exception for the proposed site, but health system officials have not decided whether that would be done through the city or through Washington County government. The site is outside city limits, but health system officials have said they would ask to be annexed into the city.
 
On May 14, health system officials withdrew their first application for a certificate of need, citing difficulties with their financing plan and other problems state officials raised.
 
Although the revised plans are "virtually ready to go," Health System President and CEO James Hamill said last week, members of his staff, city officials, and a representatives of the planned Mount Aetna Farms development met regularly for several weeks in private talks.
 
Hamill and city officials familiar with the meetings have said the discussion topics included zoning, and the cost of installing water, sewer and roads systems. There is no current policy to determine who would pay for those systems.
 
"We are trying to find a way to satisfy the concerns of the city before we submit" plans to the Maryland Health Care Commission, Hamill said.
 
The health system wants to avoid another situation in which the city disputes the hospital application. The city spent about $300,000 on expert advice before the hospital withdrew its first application.
 
City Council members reached Wednesday said they do not know what the reason is for the delay, but it is not the private talks.
 
"I don't believe that at all," said Councilman Kristin B. Aleshire. He said that if the hospital doesn't receive proper zoning, then discussions about water and sewer connections will be moot.
 
Councilman N. Linn Hendershot said, "I think they're having a hard time justifying some of the costs."
 
Councilwoman Carol N. Moller said she was not aware of the status of the talks, but did not believe they were the reason for any delays.
 
Councilman Lewis C. Metzner said, "One can conjecture they (hospital officials) want to wait until May and see what the elections bring about."
 
Councilwoman Penny M. Nigh did not return a phone call seeking comment.
 
The city officials were divided over the likelihood they would again dispute the hospital plans.
 
Moller and Aleshire said they would prefer letting the state handle the case without further input from the city, while Hendershot said he wouldn't rule out spending more money on experts.
 
Metzner said he wouldn't rule out the possibility that the city attorney's office could submit disputes if needed.
 
Copyright The Herald-Mail ONLINE
 
 

 
Health matters
 
Daily Record
Thursday, September 9, 2004
 
According to a study commissioned by the California Nurses Association on pricing practices at more than 4,000 hospitals in the United States, Maryland — considered to be the most heavily regulated state on health care matters — had the lowest state average markup by hospitals on charges over costs, an average of 120 percent, versus an average 232 percent markup for all 4,184 hospitals surveyed.
 
Copyright 2004 Daily Record.  All rights reserved.
 
 

 
Oversized backpacks a health concern for students
 
By Kimberly Marselas, Staff Writer
Annapolis Capital
Wednesday, September 8, 2004
 
Walking down the sidewalk toward his dad's car, Brandon Williams happily pulled along a rolling backpack and showed off his near-perfect posture.
 
"I like the ones with the wheels," the third-grader said, pointing to the bottom of a bag more suited to a business traveler than an elementary-schooler. "Because straps, whenever I wear them, one of the parts hurts me."
 
Brandon's older brother, Adam, wasn't so concerned about pain when he went back-to-school shopping with his parents this summer.
 
The Central Elementary School fifth-grader opted for a more traditional - read cooler - bag this year.
 
Parents are faced with a difficult decision when buying backpacks: Give in to their children's wishes for a high-fashion bag, or choose one specially designed to keep excessive weight off their backs.
 
Over the past several years, various medical studies have found that overloaded backpacks can lead to neck and back strain even among elementary school students.
 
Annapolis chiropractor Jonathan Holtzman said he usually sees 15 to 20 cases of bookbag-related back pain within the first few weeks of each school year. Students whose back muscles have been out of use most of the summer suddenly have to begin carrying a load of books for long periods of time.
 
One Italian study found that the average additional weight carried by a child was equal to that for a 176-pound man lugging around an extra 39 pounds each day.
 
"When you add this enormous weight ... it causes undue stress and strain to muscles of the upper back," Mr. Holtzman said. "I think it is both fair and reasonable to say that backpacks are a significant cause of back pain in students."
 
Edgewater mom Holly Jensen agrees. She made her daughters start using rolling backpacks in first grade, when they started bringing home heavy textbooks.
 
"I can't pick them up," Ms. Jensen said last week, waiting at school to drive the girls home from school. "I don't know how they do it."
 
The risk of injury might grow as students get older.
A University of Michigan Health System study last year found that middle-school children were more likely to report back pain than third-graders.
 
The middle-schoolers carried 11.4 percent of their body weight on average, while the elementary school students hoisted about 5.7 percent.
 
But the lead researcher reported that the older students' decreased activity probably contributed to the pain more than carrying a heavier pack.
 
Mr. Holtzman, however, thinks increasing course loads, more books and schools without lockers are largely to blame.
 
At Magothy River Middle School in Arnold, administrators make sure students don't have to carry heavy materials around during the day. Children aren't allowed to take bags from class to class. Instead, they're encouraged to make pit stops at lockers during class breaks to swap books and binders.
 
The school also has class sets of most books, so students can take their copies home and leave them there. Parents who are still concerned about the weight of their children's backpacks can discuss that with teachers or the school nurse.
 
"We're sensitive to individual cases," said Principal Charles Dunlap. "If there is an issue ... we'll work with the students and the parents."
 
Mr. Holtzman said parents can also take precautions to protect their kids' backs.
 
Limiting backpack weight to 10 to 15 percent of the child's body weight will help because it keeps him from leaning forward to counterbalance the bag.
 
He also suggests that parents choose specialized bags like pull-behinds or chiropractic backpacks. And no matter what type of bag students want, parents should buy the smallest one possible.
 
"Keep in mind that the bigger the bag, the more 'junk' it will inevitably hold, increasing its weight," Mr. Holtzman said. "Older students should carry a bag only big enough to carry the essentials and try to cut down on other noncritical items that weigh the bag down."
 
Published September 08, 2004, The Capital, Annapolis, Md.
Copyright © 2004 The Capital, Annapolis, Md.
 
 

 
Some agencies fall short on keeping records
 
By Jim Lee
Carroll County Times Staff Writer
Wednesday, September 8, 2004
 
Many state agencies violate state law because they do not keep track of public records under their control.
 
In a survey of 69 state agencies, boards and commissions, only 33 provided copies of their records retention and disposal schedules.
 
Sixteen agencies indicated they do not have the schedules; 10 other agencies responded to the Public Information Act request, but did not provide schedules or indicate whether they exist; and 10 agencies did not respond at all to the PIA request.
 
Despite that, the state attorney general's office said nothing needs to be done to educate agency personnel about their responsibilities under the law.
 
"Training may be useful, but I don't think it is necessary," said Bob McDonald, chief for opinions and advice for the attorney general's office.
 
Tom Marquardt, chair of the Maryland-Delaware-DC Press Association Freedom of Information Subcommittee, said proper procedures for maintaining and disposing of public documents is something every state agency should be familiar with.
 
"Without the schedules, that allows an agency to throw away a public document because they don't have the space or just don't want it to be public anymore," he said.
 
Richard Herring, administrator at the state Records Management Division, said all state agencies are supposed to develop records retention and disposal schedules and send them to his office for approval.
 
"That's required by law," he said. "If it is considered a record material, they must have a schedule."
 
Without records retention and disposal schedules, records that should be archived with the state may be destroyed. Herring said agencies need to look at four basic values - administrative, fiscal, legal and archival - when considering what to do with records under their control.
 
Administrative refers to normal, short-term record keeping such as daily correspondence. Records with a fiscal value are those that may be subject to audit by either the state or federal government. Records with legal value need to be retained to protect the interest of the state or its clients. Archival records are those that have a historical value.
 
Pat Melville, director or appraisal and description at the State Archives, said the agencies themselves are responsible for creating their own records retention and disposal schedules, but the schedules have to be approved by the State Archivist.
 
The Maryland Automobile Insurance Fund is one agency that properly tracks records and has developed a booklet with the agency's retention and disposal schedules.
 
Mark McCurdy, spokesman for the Automobile Insurance Fund, said tracking records is essential to the successful operation of his agency.
 
"We want to know where our paper is and how to get it as fast as possible, so we are highly motivated to be good at this," he said.
 
Other agencies, by contrast, didn't know whether the retention schedules even existed.
 
Robert Flanagan, secretary for the Maryland Department of Transportation, sent a copy of the Department of General Services Records Management Manual, but did not provide records retention and disposal schedules. Several follow-up contacts seeking the schedules have been unsuccessful.
 
Herring, at the Records Management Division, said the Department of Transportation's response didn't make sense.
 
"The guidelines are no good if they don't have a schedule to keep [the records], he said.
 
Three other agencies also sent copies of the Department of General Services manual, but did not send records retention and disposal schedules.
 
McDonald said there could be many reasons for the agencies' failure to respond properly to the public information request.
 
"It may well be that the person that normally responds to the PIA request did not understand it," he said. "They are supposed to have records retention and disposal schedules, and if you are the PIA coordinator, you should be familiar with it."
 
Some agencies where the fiscal or legal value of records is obvious, such as the Office of Grants and the Office of Homeland Security, have no records retention and disposal schedules.
 
James Scholtes, the deputy counsel to the governor who responded to the public information request with a letter stating those agencies did not have schedules, did not return repeated phone calls over two days.
 
Herring said nobody checks to make sure agencies have records retention and disposal schedules. It is up to each agency to make sure the schedules are in place and are up to date.
 
He wasn't surprised, however, that so many agencies either don't have them or don't know about them.
 
"Records management has always been low on the totem pole when it comes to agencies that are short-staffed and don't have the people to devote to it."
 
Marquardt said the lack of records retention and disposal schedules not only violates state law but could result in people being denied access to records they are legally entitled to.
 
"It just opens the door to misbehavior," he said.
 
Agency responses
 
The following state agencies provided copies of their records retention and disposal schedules:
 
Maryland Automobile Insurance Fund
 
Maryland State Police
 
Maryland Lottery
 
Maryland Department of Aging
 
Maryland State Board of Contract Appeals
 
Maryland Emergency Management Agency
 
Injured Workers Insurance Fund
 
State Retirement and Pension System of Maryland
 
Office of the state prosecutor
 
Maryland Department of Business and Economic Development
 
Rural Maryland Council
 
Maryland Stadium Authority
 
State Board of Elections
 
Maryland Environmental Service
 
Maryland Department of Housing and Community Development
 
Department of Human Resources
 
Maryland Health Care Commission
 
Health Care Claims Arbitration Office
 
Property Tax Assessment Appeals Board
 
Maryland Department of General Services
 
State Ethics Commission
 
Maryland Insurance Administration
 
Workers Compensation Commission
 
Public Service Commission
 
Office of People's Counsel
 
Maryland Institute for Emergency Medical Services
 
Maryland Department of the Environment
 
Maryland State Department of Education
 
Governor's Office for Children, Youth and Families
 
Office of the Public Defender
 
Maryland Department of Veterans Affairs
 
Maryland Department of Health and Mental Hygiene
 
Department of Juvenile Services
 
The following state agencies responded to a public information request by stating they do not have records retention and disposal schedules:
 
Office of Minority Affairs
 
Office of Grants
 
Office of Community Affairs
 
Office of Service and Volunteerism
 
Office of Homeland Security
 
Office of the Deaf and Hard of Hearing
 
Subsequent Injury Fund
 
Canal Place
 
State Higher Education Labor Relations Board
 
Maryland School for the Deaf
 
Maryland Teachers and State Employees Supplemental Retirement Plans
 
Governor's Workforce Investment Board
 
Maryland Public Television
 
Maryland Economic Development Corporation
 
College Savings Plans of Maryland
 
Governor's Office of Crime Control and Prevention
 
The following state agencies responded to a public information request, but did not provide records retention and disposal schedules or indicate whether they exist:
 
Maryland Department of Transportation
 
Maryland Department of Natural Resources
 
Maryland Commission on Human Relations
 
Maryland Tax Court
 
Maryland Food Center Authority
 
Maryland Department of Budget and Management
 
Department of Agriculture
 
Maryland Department of Planning
 
Maryland Higher Education Commission
 
Maryland Health and Higher Education Facilities Authority
 
The following state agencies did not respond at all to a public information request for their records retention and disposal schedules:
 
Office of Intergovernmental Affairs
 
Office for individuals with Disabilities
 
Maryland Office of Smart Growth
 
Department of Labor, Licensing and Regulation
 
Maryland Office of Administrative Hearings
 
Maryland Energy Association
 
Government House Trust
 
Maryland Technology Development Corporation
 
Uninsured Employers Fund Board
 
Maryland Venture Capital Trust
 
Copyright © 2004 Carroll County Times
 
 

 
State agencies improve PIA request response rate
The percentage of state agencies responding to a Public Information Act request improved by 26 percent over a similar test last year.
 
By Jim Lee
Carroll County Times Staff Writer
Wednesday, September 8, 2004
 
In 2003, the Maryland-Delaware-DC Press Association Freedom of Information Subcommittee tested agency compliance with the state's Public Information Act. The group sought 25 public records from a dozen state agencies and, after only 60 percent of the agencies complied with the law, the state attorney general's office put on a training session with the aim of improving that number.
 
On June 30, PIA requests were sent to 69 state agencies. Only 10 agencies did not respond.
 
Tom Marquardt, chair of the MDDC FOI subcommittee, said he was pleased with the results.
 
"Of course, we would like to see 100 percent," he said. "But I think it indicates improvement."
 
Bob McDonald, chief of opinions and advice for the state attorney general's office, said he thought the improved response rate was positive.
 
"I'm glad that the people who did respond did so," he said. "It was a little troubling that 10 agencies would not respond at all. Hopefully we can do better next time."
 
The attorney general's office held a training session at the beginning of the year for state agencies after last year's audit produced only a 60 percent response rate. At that training, the AG's office recommended that agencies put in place a policy for handling Public Information Act requests.
 
Despite that recommendation, only eight of the 59 agencies that responded indicated they had put such a policy in place.
 
Marquardt said that was disappointing.
 
"It's a simple procedure to do," he said. "It enables the public to get access and it's a win-win for everyone."
 
Only three of the agencies responding to the request charged for copies of the requested documents, and all the charges were reasonable.
 
Marquardt said that was a good sign for people seeking public records.
 
"The fact that they elected not to charge when they can, I think, speaks to their attitude toward openness," he said.
McDonald said that he would like to see every agency respond properly to Public Information Act requests, but he was happy with the improvement.
 
"It's a good trend," he said.
 
Copyright © 2004 Carroll County Times
 
 

 
Virus crashes computers at some county offices
 
Annapolis Capital
Wednesday, September 8, 2004
 
A computer problem knocked out e-mail access for about 1,300 county employees yesterday morning, as technicians worked overnight and this morning to restore service.
 
"It's an unidentified virus," said Jody Couser, spokesman for County Executive Janet S. Owens. "We are working diligently to identify the virus, and once it's identified we can find the appropriate antidote, if you will."
 
Ms. Couser said the virus hit about 10:30 a.m. yesterday. Workers still had access to internal files, word processing and Internet service, but they could not open the e-mail program Groupwise.
 
Last week, the Sasser 2 virus hit Anne Arundel Community College's Arnold campus, shutting down the school's network and roughly 2,600 computers.
 
That virus attacks Microsoft Windows 2000, NT and XP operating systems, and spreads through the network.
 
Published September 08, 2004, The Capital, Annapolis, Md.
Copyright © 2004 The Capital, Annapolis, Md.
 
 

 
Journals Insist Drug Manufacturers Register All Trials
Editors Say That, Otherwise, Studies Will Not Be Published; Goal Is to Ferret Out Suppressed Data
 
By Shankar Vedantam
Washington Post Staff Writer
Thursday, September 9, 2004; Page A02
 
A dozen editors of prestigious medical journals jointly announced yesterday they will refuse to publish drug research sponsored by pharmaceutical companies unless the studies are registered in a public database from the outset -- a step designed to ferret out unpublished studies that find medications to be ineffective or dangerous.
 
The initiative creates a potent incentive for companies to register their drug trials and is expected to give physicians and the public a window on unfavorable studies that companies routinely suppress.
 
"When a pharmaceutical company sponsors a clinical trial and the results turn out not to be in the best financial interests of the company, it has been our experience these results are never made public," said Gregory D. Curfman, executive editor of the New England Journal of Medicine. "They are buried away."
 
More than two-thirds of studies of antidepressants given to depressed children, for instance, found the medications were no better than sugar pills, but companies published only the positive trials. If all the studies had been registered from the start, physicians would have learned that the positive data were only a fraction of the total.
 
The new requirement calls on companies to register their trials well before anyone knows whether a study will turn out positive.
 
The Journal of the American Medical Association, the Annals of Internal Medicine, the Lancet, the New England Journal of Medicine and several other international publications have signed on to the initiative, and their editors hope that more will join in.
 
Jeff Trewhitt of the Pharmaceutical Research and Manufacturers Association of America said several companies are already registering clinical trials on a voluntary basis and that a lot of information is already being made public. Individual companies, he said in a statement, "may have reservations about divulging proprietary information in clinical tests that are in very early phases. . . . [I]n the end it is their decision."
 
Responding to the growing outcry over suppressed medical studies, the House Energy and Commerce subcommittee for oversight and investigations plans today to ask executives of seven leading drug manufacturers whether they withheld information about the potential risks of suicidal behavior in children taking their popular antidepressant medications.
 
While companies could forgo publication in the journals and thereby avoid registration, the editors hope that preserving the opportunity to publish a positive study in a prominent journal, which can greatly boost the visibility of a new drug, will be a juicy enough carrot.
 
The medical editors' initiative also asks companies to report the studies' results in the database, but the editors acknowledged that if a trial turns out to be unfavorable, a company could decide not to. Still, they said, just knowing of the existence of the trial through the registration requirement would be telling.
 
"Registration in and of itself is a very big step," Curfman said. "Even if there aren't results out there, the very fact it is known this trial was conducted is a very big step forward -- it becomes much harder to bury a trial away."
 
Christine Laine, senior deputy editor of the Annals of Internal Medicine, said the requirement would apply to any trial begun after July 1, 2005. For trials already in progress, she said, companies would have to register them before seeking publication.
 
A number of initiatives are also underway in Congress to enforce registration of trials. The federal Food and Drug Administration Modernization Act of 1997 established a database called ClinicalTrials.gov and required companies to register trials, but many companies have evaded the requirement or filed incomplete information. FDA officials said there has been no enforcement, in part because Congress was vague about who would wield the stick.
 
Democrats in the House and Senate are expected to introduce legislation soon that would impose penalties on companies that do not register their trials with the government-run database before recruiting patients. Unlike the 1997 law, proposals would require registrants to list not only when a trial began, how many patients were recruited and what yardsticks of performance were used, but also what the study found.
 
"I understand the concern of some companies that if they report an adverse result their stock might suffer," said Rep. Edward J. Markey (D-Mass.), who said he and Rep. Henry A. Waxman (D-Calif.) would introduce a bill in the next two weeks. "But consider the alternative -- patients suffer as doctors prescribe in the dark."
 
The ClinicalTrials.gov database, which was a party to the journal editors' new initiative, recently expanded its format to include the primary and secondary outcome measures of a trial and details of when trials end. While journal editors will encourage the use of ClinicalTrials.gov, Laine said other databases could also be used, so long as they are maintained by nonprofit entities and abide by the rules laid down by the editors.
 
In today's congressional hearing, executives from GlaxoSmithKline, Wyeth Pharmaceuticals, Forest Laboratories Inc., Eli Lilly & Co., Bristol-Myers Squibb Co., Organon USA and Pfizer Inc. are expected to be asked about the controversy over suppressed studies information and the use of antidepressants among children.
 
Last year, British authorities warned doctors not to prescribe a number of antidepressants to children, citing an increased risk of suicidal behavior. The FDA has declined to take a similar step, citing the need for more careful evaluations. Today's hearing will also question FDA officials. In February, an internal agency report found that the medications were associated with an increased risk of suicidal behavior. Top FDA officials played down the report at the time and refused to make it public until recently.
 
A second internal agency analysis, undertaken after researchers from Columbia University reclassified suicidal cases reported in company trials, recently produced statistical findings that appeared to confirm the February assessment.
 
Last week, the author of the new report, FDA scientist Tarek Hammad, told investigators working for Senate Finance Committee Chairman Charles E. Grassley (R-Iowa) that his analysis agreed with the earlier finding -- and that he favored stronger warning labels on the drugs. The first internal report had recommended that the agency discourage the use of antidepressants other than Prozac for depressed children.
 
Grassley's investigators said Hammad went further this week and told them, "I can no longer say that Prozac is okay for children."
 
© 2004 The Washington Post Company
 
 

 
Antibiotic increases sudden-death risk
Study finds heart hazard can rise 5-fold when drugs react with erythromycin
 
By Jonathan Bor and David Kohn
Baltimore Sun Staff
Thursday, September 9, 2004
 
A commonly used antibiotic increases the risk of sudden cardiac death, particularly when taken with certain blood pressure medications and other drugs, doctors said yesterday.
 
The antibiotic, erythromycin, is used to treat a wide range of bacterial infections, from bronchitis to pneumonia. The increased risk has been known for years, but this is the first study to establish the extent of the hazard.
 
"We tried to put a quantity on the risk," said one of the authors, Michael Stein, a clinical pharmacologist at the Vanderbilt University School of Medicine in Nashville. Stein and other researchers at the school combed through Medicaid records of Tennessee residents and found that people taking the drug had double the risk of sudden death.
 
But the risk was fivefold among people taking erythromycin and various other drugs that seemed to increase the antibiotic's concentration in the bloodstream.
 
Though small, the risk was sufficient for the Vanderbilt researchers to advise doctors not to prescribe the drugs in combination, particularly because there are good alternatives.
 
Among the drugs with which erythromycin reacts are the blood pressure medications verapamil and diltiazem and the anti-fungal medications fluconazole, ketoconazole and itraconazole.
 
The study appears in today's New England Journal of Medicine.
 
Stein emphasized that even for those in the high-risk group, "the level of risk is low."
 
"In the average person who's healthy, it's generally a safe drug," he said. In 1997, the blockbuster antihistamine Seldane was taken off the market in the wake of reports of sudden death among people taking it in combination with erythromycin. The allergy drug seemed to raise blood levels of the antibiotic.
 
In both those cases and the
 
ones cited yesterday, the drug combinations were associated with an abnormal rhythm in the left ventricle, the heart's main pumping chamber, which can trigger sudden death in otherwise healthy people. The risk appears to be greater among women, the researchers said.
 
It is difficult to pinpoint exactly how many Americans use erythromycin, Stein said. The drug has long been a generic and is produced by several companies.
"It's one of the most commonly used antibiotics," Stein said.
 
Dr. Muhamed Saric, a cardiologist at the University of Medicine and Dentistry of New Jersey, said heart specialists were aware of the drug's potential risks for years, but he suspects that some general practitioners were not.
 
"In most cases, there is not a compelling reason to use erythromycin over other antibiotics," said Saric, calling the risk unacceptably high. "There is such a panoply of antibiotics."
 
Stein said the researchers would likely turn their attention to other classes of antibiotics, to see whether these drugs also raise the risk of cardiac arrest. Case reports suggest this might be true for some of these drugs, he said, though the Vanderbilt study found no heightened risk with amoxicillin, another common antibiotic.
 
Dr. Stephen Gottlieb, head of the cardiac care unit at the University of Maryland School of Medicine, said doctors have long known that erythromycin when used with certain other drugs can trigger an abnormally fast heart rhythm called torsade de pointes that can be fatal.
 
"But there are risk factors from any medicine," Gottlieb said, pointing out that some cause severe allergic reactions. "Bad things can happen, and they always have to be considered."
 
Copyright © 2004, The Baltimore Sun
 
 

 
How Drug Giant Keeps a Monopoly On 60-Year-Old Pill
Barr Strikes Out in Bid to Sell Copy of Wyeth's Premarin; Lessons for Biotech World
 
By Leila Abboud, Staff Reporter
Wall Street Journal
Thursday, September 9, 2004; Page A1
 
About 15 years ago, Bruce Downey started working for the generic-drug company Barr Laboratories as an outside lawyer. One of his first tasks was to figure out how to market a copy of Premarin, the big-selling hormone-therapy drug.
 
Fifteen years later, Mr. Downey is Barr's chief executive -- and he's still working on that assignment.
 
The big pharmaceutical company Wyeth has been the sole seller of Premarin since 1942, even though its patent protection expired decades ago. A study published two years ago cast doubts on the long-term safety of taking hormone-replacement pills, but they are still used by millions of women to alleviate the symptoms of menopause and keep their aging bones strong.
 
Copying most drugs is a fairly simple matter. Their chemical formula is published on the label, and the steps for making that chemical are either published or easily deduced. Once the patent on the drug expires, anyone is free to copy it. The Food and Drug Administration has an abbreviated process for approving the sale of copied drugs, so long as a generic maker can prove its products are equivalent to the original.
 
Premarin is different. It is derived from the urine of pregnant mares and nobody -- not even Wyeth, its maker -- knows exactly what chemicals are in it. Rather than trying to produce a perfect copy of this witches' brew, Barr's goal all along has been to make a pill that resembles Premarin closely enough to get the Food and Drug Administration's approval as an "equivalent" drug.
 
But "close enough" is a slippery concept. It first slipped out of Barr's grasp in 1991 as the FDA, under heavy pressure from Wyeth, changed its guidance about what represents equivalency to Premarin. Undeterred, Barr spent five years deciphering the major ingredients in Premarin and preparing a second FDA application. That too failed amid a Wyeth lobbying blitz. Then Barr made a bet on a tiny Minnesota supplier that claimed it could cook up a Premarin equivalent from mare's urine. But the supplier soon ran into trouble.
 
After the heavy publicity over the last two years about the dangers of Premarin and the related drug Prempro, it might seem like a strange time for Barr to keep trying to copy the drug. But with the market for Premarin still a big one, Barr says giving up is not an option. "Premarin is a religion around here," says Carole Ben-Maimon, head of Barr's proprietary drug division.
 
The Premarin saga shows the high stakes in the quest for drug knockoffs, and the lengths big companies go to protect their profits from attack by generic rivals. It also offers a preview of the looming debate over how to bring the first generic versions of expensive biotechnology drugs to market. Biotech drugs such as the anemia drug Epogen and the rheumatoid-arthritis treatment Remicade are enormously complex molecules related to the body's own proteins. As with Premarin, it will be hard for a generic to prove equivalency to these drugs.
 
The FDA will have to decide what is close enough for a generic biotech drug. Biotech companies are arguing for a stringent standard, saying patient safety could be compromised otherwise. Others say smoothing the way for generics could help save billions of dollars in drug costs since many biotech drugs cost tens of thousands of dollars. The issue is expected to be taken up in Congress over the next few years, and the FDA is taking the first steps by holding public meetings on the scientific issues.
 
Barr is likely to be in the thick of the fight. The generics company, based in Pomona, N.Y., and now officially called Barr Pharmaceuticals Inc., has long targeted branded drugs that for technical or commercial reasons are hard for other companies to copy. Barr hit the jackpot when it marketed the blood thinner warfarin because it was technically difficult to manufacture and no generics companies relished taking on the entrenched brand company, at the time part of DuPont Co. Led by Mr. Downey, chief executive since 1994, Barr has grown into a powerhouse in the generic-drug sector, and its stock price has soared nearly fourfold in five years. Barr has gone from 350 employees and $109 million in revenue a decade ago to 1,500 employees and $1.3 billion in revenue last fiscal year.
 
Premarin would be a major moneymaker for Barr. The drug brought in $841 million for Wyeth in the 12 months ending June 30, 2004, about half the peak level. Barr's generic would probably be the only competitor to Premarin, so Barr could offer a discount of just 20% to 30% off Wyeth's price.
 
That's assuming Barr can ever get a generic approved -- a prospect that its two decades of woe don't encourage.
 
Barr first thought it was on the road to success in 1986. That's when the FDA drew up a list of what it described as the key ingredients in Premarin -- various kinds of the hormone estrogen joined or "conjugated" in a single molecule that could be used to replace the depleted estrogen in menopausal women. The FDA suggested to generic companies that they craft a synthetic version of this conjugated estrogen and show that it worked the same way as Premarin in the body. If companies could do this, the FDA hinted, they could market a "generic Premarin" even though the generic wouldn't be exactly identical to Premarin.
 
Two years later, Barr got a letter from the FDA saying that the company had nearly fulfilled the requirements. Convinced that approval was near, Barr expanded the factory where it planned to manufacture generic Premarin. Hundreds of boxes of glass vials were ordered. Labels with the product's name were printed up.
 
But Wyeth, then known as American Home Products, was swinging into action. Wyeth complained to the FDA that Barr and two other generic applicants weren't doing stringent-enough tests to show that the generics were processed by the body in the same way as Premarin. The FDA eventually agreed and rejected the generic companies' applications.
 
In 1991, the FDA laid down tougher requirements for generics, asking that they show in blood tests instead of the urine tests required previously that their products were equivalent to Premarin in key measures.
 
Barr realized its earlier candidate was unlikely to pass the tougher test. To counter Wyeth's criticisms, it would need a drug that acted exactly like Premarin in more ways. And to make such a drug, it needed to know a whole lot more about Premarin.
 
That wasn't an easy job. Like most generics companies, Barr specialized in manufacturing pills and testing them in humans to prove their equivalency to the original product. It typically bought the active ingredients in bulk from an outside supplier and rarely had to do basic chemistry research in-house.
 
Salah Ahmed, the head of research and development, put five chemists full-time on Premarin. They started with Wyeth's finished tablet and tried to decode its ingredients. Dr. Ahmed sometimes worked until midnight, fiddling with the polymer that coated the tablets. Chemists carried out hundreds of tests to find a formulation that dissolved in exactly the same way Premarin did.
 
Dr. Ahmed, now a Barr senior vice president, said he had never seen a raw material so unwilling to give up its secrets. "We ate, slept and breathed conjugated estrogens," recalls Dr. Ahmed's colleague, Charles DiLiberti, now Barr's vice president of scientific affairs.
 
Barr finally came up with a formulation it thought met the FDA requirements for generic Premarin. The FDA application for it would fill 17 boxes. "It was so big we couldn't even FedEx it," recalls Christine Mundkur, head of regulatory affairs. The company filed the application in July 1995.
 
Wyeth was ready with a counteroffensive. It prepared tests suggesting that a previously unknown ingredient in Premarin known as delta-8,9 had a role in the drug's effectiveness.
 
Generic companies disputed that, but Wyeth had another, more subtle, argument. Even if delta-8,9 turned out to have no therapeutic benefit, it was clearly a newly identified ingredient in Premarin that had some effect, however tiny, on body chemistry. How could the FDA be sure, Wyeth asked, that Premarin didn't contain many more such ingredients -- unknown and perhaps unknowable -- with possibly crucial good effects?
 
As the FDA held a series of meetings to evaluate Wyeth's claims, Mr. Downey, the Barr chief executive, recalls that it took weeks to find top-level scientists to testify on Barr's behalf because so many of them had worked with or consulted for Wyeth. Politics came into the debate too. Representatives from several women's groups and some women in Congress urged the FDA not to approve generic Premarin because its safety could not be assured.
In May 1997, Mr. Downey got an early-morning call from an FDA official: Barr's application was being denied. The FDA decided that until Premarin was "adequately characterized," no synthetic version could be approved. Any company that wanted to sell generic Premarin would have to start with pregnant mares' urine so as to ensure that the generic was as similar as possible to the brew of known and unknown ingredients in Premarin.
 
"You gotta be kidding me," Mr. Downey remembers saying. He was convinced Wyeth's lobbying and political clout with the Clinton administration had won the day.
 
Janet Woodcock, who headed the FDA's drug-evaluation division at the time and is now a deputy commissioner at the agency, denies that. She says the agency changed its mind several times about the requirements for generic Premarin because the science was evolving. Michael Dey, the head of the women's health division at Wyeth, says Wyeth's goal throughout the debate has been to ensure that women get safe and effective drugs.
 
After the second defeat, some Barr executives advised Mr. Downey to cut his losses and give up. He refused to consider it. He recalls his childhood in explaining his persistence: His family grew Christmas trees on a farm in Athens County, Ohio, and it took eight years of tending before they matured and his Boy Scout troop could sell them door-to-door.
 
Barr started searching for a bulk supplier of mares' urine. The supplier would need to have access to tens of thousands of pregnant mares and collect their urine starting three months into their 11-month gestation. Employees traveled across the U.S. and as far as Australia. A group went to western China to check out a potential supplier, slept on straw beds and was feted with a dinner of goat meat. Robert Bell, then vice president of branded-drug development at Barr, brought home a bucket of Chinese horse urine in an airplane's overhead bin.
 
But these suppliers couldn't answer a crucial question: how to extract conjugated estrogen, the presumed main active ingredient in Premarin, from the urine and turn it into powder form. "That's the holy grail part," Mr. Downey says. Despite its enthusiasm, Barr wasn't ready to tackle that chemistry problem itself, since it was far from the expertise of the company's scientists.
 
Barr's search finally led to a small Minnesota-based company called Natural Biologics Inc. in 2002. Natural Biologics had access to hundreds of horse farms and claimed to have cracked the code for turning urine into a powder, which would be the raw material for a generic Premarin pill. Barr tested the powder and found it to be good.
 
There was one hitch: Wyeth had sued Natural Biologics in federal court, alleging that it stole trade secrets. The case hadn't yet been resolved. Mr. Downey knew it was risky but decided to go for a deal after several meetings with Natural Biologics' principal backer, John Albers, the former chief executive of soft-drink maker Dr Pepper. Barr lent Natural Biologics $15.7 million to expand its manufacturing capacity.
 
In 2003, using Natural Biologics' product, Barr applied for FDA approval for generic Premarin.
 
For the third time, it wasn't to be. In September 2003, a federal court in Minnesota ruled that the recipe was illegally obtained. Since 1966, Wyeth had made Premarin by a secret method dubbed the "Brandon process" at a factory in Manitoba. To safeguard the method, employees had to sign confidentiality agreements. For 13 years, Wyeth didn't even commit the recipe to paper, doing so only after regulators required it.
 
To get a hint of how Wyeth turned urine into powder, Natural Biologics' president, David Saveraid, obtained "waste manifests" that listed chemicals disposed of at the plant, according to the judge's opinion. Mr. Saveraid also was found to have enlisted a former Wyeth chemist who had played a big role in devising the Brandon process. The two spoke 50 times by telephone and communicated by fax in late 1994 and 1995, the opinion says. The judge called this contact improper and said Mr. Saveraid lied about it in his testimony at the trial.
 
The judge permanently barred Natural Biologics from making or selling estrogens extracted from urine, regardless of the method used. Natural Biologics was also barred from further research and development. The order effectively shut down the company.
 
Rich Mark, an attorney for Natural Biologics, says the company doesn't admit to any wrongdoing and is appealing the case. Mr. Mark says the chemist wasn't under any confidentiality agreement with Wyeth and Mr. Saveraid told the truth at the trial. Mr. Mark says Natural Biologics never tried to hide its efforts to make the active ingredient of Premarin and even sent out brochures to recruit horse farmers.
 
Mr. Downey isn't giving up. He's taken calls from companies in Australia, Canada and Europe about supplying the mare's urine. One Argentinian company claims it can derive Premarin's active ingredient from the urine of women.
 
Mr. Downey isn't sure about that, but he believes someone will decode the recipe for producing the right kind of powder -- and when they do, Barr will be ready to snap it up. "It's just a matter of chemistry and people figuring it out," he says.
 
Copyright 2004 Dow Jones & Company, Inc. All Rights Reserved.
 
 

 
US Health Care Premiums Jump 11.2%
 
Associated Press
Wall Street Journal
Thursday, September 9, 2004
 
NEW YORK (AP)--Health care costs continued to surge this year as family premiums in employer-sponsored plans jumped 11.2%, the fourth year of double-digit growth, according to a new study.
 
The cumulative effect of rising health care costs is taking a toll on workers: There are at least 5 million fewer jobs providing health insurance in 2004 than there were in 2001, according to the survey of 3,017 companies by the Kaiser Family Foundation and the Health Research and Educational Trust.
 
This year, 63% of firms offered health benefits to workers, down from 68% in 2001. The change is primarily driven by a decrease in the number of small firms, those with 3 to 199 workers, that offer coverage.
 
The average premium for a family of four grew to $9,950 annually. The family premium for a preferred provider organization, the most common type of insurance, hit $10,217 -the first time it broke the $10,000 barrier. PPOs are plans that provide members with a network of discounted providers that charge a copayment but also allows for the opportunity of using other doctors and hospitals.
 
Firms with between three and 24 workers reported the biggest hike in the average family premium, 13.6 percent.
 
"Health insurance is becoming unaffordable, especially for small employers. We should expect the ranks of uninsured to grow as small employers can't afford health insurance," said Drew Altman, president of the Kaiser Family Foundation.
 
Altman noted that the hike in health premiums outpaced both the 2.2% growth in wages and 2.3% growth in inflation by five times.
 
"There is a great sense that there is just no answer to this problem," Altman added.
 
The average premium for single coverage rose 9.2% to $3,383 annually.
 
The percentage employees paid toward the premiums remained steady with singles picking up 16% of the tab, the same as 2003. Employees paid 28% of the family premium, up from 27% a last year.
 
However, singles' out of pocket costs for the premium rose 9.8% to $558 annually while a worker's cost for family premium rose 10.3% to $2,661.
Since 2001, employee contributions increased 57% for single coverage and 49% for family coverage.
 
This year's increase in family premiums was below the 13.9% reported in 2003 and shifting costs to employees was less pronounced than in previous years, but Altman said such figures didn't signal any significant changes in the direction of health care costs.
 
He said the increase was lower because health plans were paying less for hospital care, doctors and some drugs while cost shifting has moderated somewhat because employers wanted to give their workers a break after years of demanding they pay more for their care.
 
For example, the average deductible for a preferred provider organization rose 4.3% to $387 for a family of four. But in 2003 the deductible rose 9.5%, after a 43% surge in 2002.
 
Deductibles for using a provider outside the PPO were essentially flat at $558 this year after soaring 20% in 2003.
 
Still, some types of cost sharing did increase. For example, the proportion of workers facing a $20 copayment for an office visit increased to 27% from 19% in 2003.
 
Employers say that they have to do a certain amount of cost-shifting to keep costs down. Klickitat County in Washington state was facing a 22% premium increase for a year that would begin in November. Instead of paying it, the county which employs 225 people, worked with its insurer to lower the increase. Now the county's increase will only be 11.5% but employees will be paying more for certain services.
 
Beginning in November county employees will have to pay 20% of their hospital stay. Currently, they pay $200 a day with a five-day limit. Employees currently pay 10% of services such outpatient surgery and chemotherapy. That will rise to 20% in November.
 
Personnel director Lori Wolford said the county considered changing plans but employees were happy with the current provider.
 
Overall, 56% of firms said they shopped for a new plan in the past year. Of those that looked, 31% changed carriers while 34% switched the type of plan they offered.
 
Overall employers are skeptical about whether tools such as disease management and consumer plans really lower costs. Only 42% of employers believed disease management and consumer driven plans were somewhat effective in lowering costs.
 
"Such efforts nibble at the edges," said Altman. He said controlling health care costs was a vexing problem because no one wants to pay more, but people also aren't willing to accept less service.
 
"I don't see any solution in the short or immediate future," he said.
Copyright 2004 Dow Jones & Company, Inc. All Rights Reserved.
 
 

 
Air pollution found to hinder children's lung development
Study of Calif. children finds growth of breathing capacity below normal; Higher risk of disease persists into adulthood
 
By Tom Pelton
Baltimore Sun Staff
Thursday, September 9, 2004
 
Air pollution retards the development of children's lungs, making the victims weaker and more vulnerable to lung ailments, heart disease and other health problems later in life, according to a study released yesterday.
 
Researchers in Southern California, which has some of the nation's dirtiest air, studied 1,759 children for eight years and found that those living in areas with the most soot and other pollutants grew up with significantly lower lung capacity, said lead researcher James Gauderman, an associate professor at the University of Southern California.
 
The report was published in today's New England Journal of Medicine.
 
Although Maryland's air quality is better than Southern California's, the Baltimore area also fails to meet federal air quality standards, and the region is among the worst 25 percent for microscopic soot particles formed when oil or coal is burned, according to a report by the Environmental Protection Agency.
 
The implication of the new study is that children in Baltimore and other areas with heavy traffic face similar problems, said Dr. Jonathan Samet, chairman of the department of epidemiology at the Johns Hopkins Bloomberg School of Public Health.
 
"This is a major piece of evidence that air pollution in the U.S. actually slows lung growth," said Samet. "And what that means is that children are reaching adulthood with less lung [capacity], meaning they are more vulnerable to other insults, like cigarette smoking."
 
Research going back to the 1930s has shown that severe episodes of smog can kill people. Scientists in the 1980s and 1990s showed that low levels of particulate pollution from vehicles, factories and power plants can lead to asthma attacks and premature death.
 
But Gauderman's study, financed with an $18 million state grant and conducted over a decade by a team of about 40 researchers, provided the first major link between chronic exposure to pollution and distortion of how childrens' bodies develop, the editorial declared.
 
"These findings are applicable to any urban area, with the higher the levels of pollution, the worse the effect on children," said Gauderman. "The solution is really at the level of government regulation.
 
"You would have to put additional emissions controls on motor vehicles to control this problem. But we can't just look at vehicles; we also have power plants, diesel engines and exhaust from trains, ships and other sources."
 
Levels of fine particle pollution were the highest in the nation in Riverside, Calif., where part of Gauderman's study was conducted. The concentration of soot there was is 93 percent higher than federal air quality standards, according to an EPA study from 2000 to 2002.
 
By comparison, Baltimore's particle level was only 13 percent above federal standards - still high enough to make it one of 120 large jurisdictions with failing air quality during these years, according to the EPA.
 
More than 400 other counties and cities met federal standards, with Santa Fe, N.M., recording the lowest particulate pollution.
 
Dr. Peter L. Beilenson, Baltimore's heath commissioner, said residents of the area suffer from significant asthma problems and other ailments related in part to air pollution. Although exhaust fumes from factories and cars aren't bottled up here as they are in the Los Angeles basin, Baltimore's failing air quality is bad enough to exacerbate health problems, he said.
 
"We've already seen from earlier studies that asthma is caused - not just aggravated - by chronic air pollution, and now we see that chronic exposure literally affects the development of the lungs," said Beilenson. "This is why we care about the Clean Air Act, and why we care when the Bush administration loosens restrictions for the smokestack industries."
 
Gauderman's study examined not only the effects of fine particulate pollution, but also those of nitrogen dioxide and acid vapor, which are likewise created by the burning of oil and coal.
 
In 1993, his team of researchers recruited more than 1,000 fourth-graders in 30 schools scattered through 12 communities in Southern California. They included youngsters who lived in the most polluted areas, such as Mira Loma, about 50 miles east of Los Angeles, and others in areas with cleaner air, such as Santa Barbara County, 200 miles north of Los Angeles.
 
For eight years, until the children completed high school, the scientists conducted annual lung tests, measuring the force and volume of the air they could blow out of their lungs. The researchers compared these numbers to yearly pollution levels.
 
Gauderman said the most significant finding was that youngsters who breathed the most pollution during their adolescent growth period were five times more likely to have reduced lung capacity by the age of 18 than children who grew up in the cleanest areas. The children from polluted areas had about 80 percent of the lung capacity of their peers from healthier regions.
 
In the future, these children could suffer breathing troubles when they catch a cold or the flu, Gauderman said. And when they become older adults, they might be more likely to suffer pneumonia or heart problems.
 
Copyright © 2004, The Baltimore Sun
 
 

 
Need for Home Defibrillators Questioned
 
By Alicia Ault
Special to The Washington Post
Thursday, September 9, 2004; Page A04
 
The Food and Drug Administration is poised to approve nonprescription sales of a heart-shocking device called an automated external defibrillator, which could trigger a flood of direct-to-consumer marketing pitches asserting that no home is safe without the $1,000-to-$3,000 machines.
 
Automated defibrillators can reverse sudden cardiac arrest if applied quickly and have been shown to save lives in public settings such as airports, but experts say it is less clear how many Americans are at risk and that it would be worthwhile to have the devices in homes.
 
"We're going to see, I will predict, ad campaigns that are likely to be more frightening than they are realistic," said Arthur L. Caplan, director of the Center for Bioethics at the University of Pennsylvania, "because you really can manipulate this into getting people to believe they need one."
 
Arthur Kellermann, chairman of emergency medicine at Emory School of Medicine in Atlanta, agreed that manufacturers are likely to overplay the value of the machines as a matter of life and death.
 
"This is a marketer's dream: It's dramatic, sensational -- it's very slick," Kellermann said. "What the FDA's been asked to do is authorize the sale of very expensive lottery tickets."
 
The defibrillators work only for a cardiac arrest, when the heart's regular beat dissolves into a random flutter that is too fast or too slow, causing it to stop pumping blood and leading to immediate loss of consciousness. The abnormal rhythm can be brought on by blocked arteries, a weakened heart or inherited conditions. It is not the same as a heart attack, though a heart attack triggers the chaotic rhythm in as many as half of arrests.
 
According to oft-quoted statistics, there are 350,000 to 400,000 sudden cardiac deaths a year -- 80 percent in the home -- but two recent studies have suggested that this estimate may be too high by one-third or more.
 
The devices tell users with step-by-step voice prompts where and how to apply two "paddles" to analyze the heart rhythm and shock it back to normal, if necessary. If the problem cannot be treated with a shock, the machine will not deliver one, and the user is prompted to start cardiopulmonary resuscitation and call 911.
 
Philips Medical Systems is seeking FDA clearance to sell its HeartStart machine over the counter. If the agency agrees, Philips said it is not planning a media blitz but will advertise through infomercials on cable TV and on health Web sites such as WebMD.
FDA officials do not comment on their deliberations, but Philips executives said, based on their meetings with the agency, that they believe approval is imminent.
 
The company, a subsidiary of the Dutch giant Philips Electronics NV, and several other manufacturers are clearly betting that over-the-counter approval will expand the market. Philips Vice President Deborah DiSanzo said sales could grow 50 percent a year over the next few years.
 
The company expects to sell 7,500 units this year, up from 2,500 in 2003.
 
Defibrillator sales to the public now account for 1 percent of the $275 million worldwide market, said Raymond W. Cohen, CEO of Cardiac Science, an Irvine, Calif.-based manufacturer that is also likely to seek FDA approval for over-the-counter sales.
 
Experts say cardiac arrest occurs often in people with no sign of heart trouble. In 40 percent of cases, there is no warning until the person collapses, said Graham Nichol of the University of Washington, who chairs an American Heart Association task force on automatic external defibrillators.
 
One just-published study suggests that the often-cited number of deaths may be overstated by as much as a third. The yearlong study, being published Wednesday in the journal of the American College of Cardiology, closely tracked the number of deaths from cardiac arrest in Multnomah County, Ore. It counted 353, compared with 1,007 deaths recorded a year earlier through less rigorous methods. Though the study was in only one community and for a limited time, it suggests that current statistics need to be reevaluated, said lead author Sumeet Chugh of the Oregon Health and Science University.
 
"If their results are accurate, past studies significantly overestimate the incidence of sudden cardiac death," Douglas Zipes of the Indiana School of Medicine, past president of the College of Cardiology, said in a statement.
 
In a paper in the New England Journal of Medicine in August, investigators said a three-year study of defibrillator use in public areas turned up only half the expected number of cardiac arrests.
 
"What has not been demonstrated is whether having [defibrillators] available without a prescription in the home will make a meaningful difference in the overall survival rate," said William Maisel of Boston's Brigham & Women's Hospital, a member of an FDA panel that evaluated HeartStart.
 
Though one is in the planning stages, there have been no studies of defibrillator use in homes, a factor that led the heart association two years ago to withhold judgment on direct-to-consumer sales. The group has since shifted its stance on the grounds that requiring prescriptions prevents wider use of the technology, Nichol said.
 
The change "means we think they are safe," he said. "We have not come out and said everyone should have these."
 
Safety is not an issue, Maisel said. But there are other concerns -- including whether panicked home users will remember to call 911.
 
Caplan worries that the device will be used on a victim whom no one saw collapse, and whose brain may have been deprived of oxygen for many minutes. Historically, about half of arrest victims live if shocked in the first two minutes. By 10 minutes, only 5 percent live.
 
The same could happen with delayed CPR, Caplan said, but "creating hundreds if not thousands more people in a persistent vegetative state or near-persistent vegetative states in nursing homes and hospitals will create an enormous emotional burden on families and much additional cost for a system already reeling from the results of the inappropriate use of life-saving technologies."
 
In the New England journal study, 26.7 percent of survivors given CPR and a shock had mild to moderate cognitive impairment.
 
Cardiac arrest survivors and friends and relatives of those who have died are among the most passionate backers of increased access to defibrillators, which they say should be viewed in the same light as fire extinguishers and smoke detectors: crucial home safety items.
 
But Kellermann and other physicians said the money would be better spent on a gym membership, cholesterol-cutting drugs or other ways to prevent heart disease.
 
© 2004 The Washington Post Company
 
 

 
Omega-3 Foods Can Put Benefits on Label, FDA Says
 
By Sally Squires
Washington Post Staff Writer
Thursday, September 9, 2004; Page A04
 
The Food and Drug Administration said yesterday that fish and other foods and dietary supplements containing omega-3 fatty acids can claim on their labels that they help reduce the risk of heart disease, even though the supporting scientific evidence is still unfolding.
 
In recent years, a growing number of studies have prompted many cardiologists to prize omega-3 fatty acids for their apparent ability to protect the heart against inflammation that can lead to blocked arteries and to reduce the risk of often-fatal heartbeat irregularities.
 
"This new qualified health claim for omega-3 fatty acids should help consumers as they work to improve their health by identifying foods that contain these important compounds," said acting FDA Commissioner Lester M. Crawford, noting that an estimated 500,000 Americans die each year from heart disease.
 
The decision applies to foods and dietary supplements containing eiscosapentaenoic acid (EPA) and docosahexaenoic acid (DHA) and allows this wording: "Supportive but not conclusive research shows that consumption of EPA and DHA omega-3 fatty acids may reduce the risk of coronary heart disease." The label must also state how many grams of EPA or DHA are contained in one serving. While the amount of DHA and EPA is not required to be listed on the standard nutrition label of food products, consumers will be directed to the ingredients label for more information.
 
Food manufacturers cannot simply add DHA or EPA to otherwise unhealthful products. With the exception of fish and dietary supplements, the agency requires that foods must be low in cholesterol (less than 20 milligrams per serving) and low in saturated fat (less than one gram per serving and less than 15 percent calories from saturated fat) to add the health claim to their labels.
 
The FDA also recommended that consumers not exceed more than three grams per day of EPA and DHA. It noted that no more than two grams should come from a dietary supplement, but the FDA did not set a minimum amount of omega-3 fatty acids that must be present in products.
 
Consumer groups called that confusing. "The key question is how much [EPA and DHA] has to be in a food," said Bruce Silverglade, director of legal affairs for the Center for Science in the Public Interest, which has teamed with Public Citizen, another consumer group, to file a lawsuit against the FDA over qualified health claims. ". . . The tenet of consumer education is to keep it simple. The FDA is making it quite complicated for health-conscious consumers who are trying to improve their diets."
 
Qualified health claims have been criticized by CSPI and other consumer groups since they were first unveiled a year ago. Unlike the standard health claims approved for such foods as oatmeal or soy, qualified health claims are based on promising, but inconclusive, scientific findings.
 
The "qualified health" claim for omega-3 fatty acids is the second to be approved by the FDA this year. In April, walnuts received approval for the first qualified health claim from the agency. Sellers of whole and chopped walnuts can claim "supportive but not conclusive research shows that eating 1.5 oz. [a little more than a handful] of walnuts per day as part of a low saturated fat and low cholesterol diet, and not resulting in increased caloric intake, may reduce the risk of coronary heart disease."
 
© 2004 The Washington Post Company
 
 

 
Health Savings Accounts Gain Momentum
 
By Louise Story, Staff Reporter
Wall Street Journal
Thursday, September 9, 2004; Page D2
 
Health savings accounts, billed as the most significant savings vehicle to hit individual investors since the IRA and the 401(k), are starting to take off.
 
The new approach to paying for health care was created in December's Medicare overhaul. It combines a tax-free account to pay for medical expenses with a high-deductible health plan with low premiums.
 
Already, tens of thousands of the new accounts have been opened. President Bush in his convention speech last week touted the accounts as a way to help small businesses afford health benefits for their employees.
 
The number is expected to grow sharply in coming months as more insurance companies and financial-services firms start to offer the new option to individuals and employers. About 20 financial institutions, including J.P. Morgan Chase & Co. and Mellon Financial Corp., are marketing HSAs, which allow holders to invest the money until it's needed for medical costs, much like a 529 plan for education expenses.
 
Some 50 insurers, including Aetna Inc., Cigna Corp. and Anthem Blue Cross & Blue Shield, a unit of Anthem Inc., have introduced the high-deductible health policies that people must have to open an HSA. Aetna says it has signed 25 large employers and 200 small companies to offer its HSA-qualified plan to employees, and it is rolling out one for individuals. Assurant Inc.'s Assurant Health, says about 67,000 customers applied for its plans from January to June.
 
By next year, HSAs are expected to become a standard product of many health insurers and large financial-services firms. Fidelity Investments says it will unveil an HSA product in 2006.
 
In tandem, an increasing number of employers, from mom-and-pop operations to major corporations such as Pitney Bowes Inc., are offering HSAs to employees. A study by Mercer Human Resources in April found that 81% of all employers with 20,000 or more employees are "somewhat" or "very" likely to offer them by 2006.
 
Fueling the momentum, the Treasury Department in July issued detailed guidelines on how the money in the accounts can be used. These clearer directions are expected to prompt even more offerings from banks and brokerage firms. A spokesman for the House Ways and Means Committee says Congress's Joint Committee on Taxation expects one million accounts will have been opened by 2004, and three million by 2013.
 
The accounts combine characteristics of individual retirement accounts, 529 plans and 401(k)s, and allow consumers to save pretax money to use for qualified medical expenses at any point, without paying taxes upon withdrawal. To start an HSA, individuals must first get a high-deductible health plan -- either by enrolling in an employer plan or by buying one on their own. They can then get an HSA either through their health plan or through an independent HSA provider. The idea behind combining the accounts with a high-deductible health plan is that such plans carry lower premiums than comprehensive insurance. In theory, the money consumers aren't spending on premiums can then be invested in an HSA.
 
According to the Treasury guidelines, HSA money can be put in all investments approved for IRAs, which includes bank accounts, annuities, stocks, mutual funds, bonds and real estate.
 
Unused money carries forward each year, and after age 65, the account holder can use the funds tax-free for Medicare premiums and co-pays, or withdraw it for nonmedical reasons and pay only income taxes. (Before age 65, HSA money withdrawn for nonmedical expenses is subject to a 10% penalty plus taxes.)
 
The investment component of these accounts is one potential boon for consumers: The money can grow tax-free if they don't need it for medical expenses. But it's also a potential pitfall if the chosen investments don't do well and the account loses money. The holder could be left with a health-insurance plan that offers minimal coverage, and not enough money to cover out-of-pocket expenses. To help protect against that, many HSAs require holders to reserve a certain amount of their accounts for medical expenses.
 
Some critics worry that these accounts may encourage people to skimp on needed medical benefits in order to build up their savings. Or, HSA holders may not put their premium savings into their accounts at all. Michael Kitces, a financial planner at Pinnacle Advisory Group in Columbia, Md., notes there is no legal requirement that people with the high-deductible health plans actually save. "Some people won't be able to follow through with that or won't get around to following through," he says.
 
Most accounts carry fees -- though some, such as those offered via eHealthInsurance.com, are free. First HSA Inc. of Reading, Pa., for example, offers an account for a one-time $25 set-up fee, but costs can range at least as high as the $65 set-up fee and $35 annual maintenance at Entrust New Direction IRA of Boulder, Colo., which also charges transaction costs.
 
The decision to choose a health savings account depends in part on your anticipated medical expenses, and your own abilities to save and invest. HSAs are considered better for younger, healthier people who are unlikely to have big medical bills and can let the savings grow.
 
The high-deductible health plans that go with HSAs are available either through your employer as a health benefit, or can be purchased directly from an insurer if you are self-employed or your employer doesn't offer health benefits. The annual deductible must be at least $1,000 for individuals or $2,000 for families, and the plan must have an out-of-pocket spending cap that doesn't exceed $5,000 for individuals and $10,000 for families.
 
The HSAs themselves are available either through the health insurer or an independent "trustee," such as First HSA, Entrust New Direction IRA and Health Savings Administrators. A list of trustees can be found at www.hsainsider.com1, which is managed by the HSA Coalition, a Washington nonprofit organization. You can contribute pretax money up to a certain amount each year -- either $2,600 a year for an individual or $5,150 for a family, or the amount of the health plan's deductible, whichever is lower. An employer can contribute a portion of that money.
 
Insurers generally offer simple interest-bearing accounts that don't offer investment choices. But some are also teaming up with financial-services firms that act as trustees and offer accounts with more investment options. For instance, J.P. Morgan Chase has joined with several insurers, including Cigna and Anthem, to offer HSAs that invest in stocks, bonds and mutual funds. The independent trustees also offer a range of investment options.
 
As for which medical expenses qualify, the Treasury guidelines define them as those that would also count as tax-deductible, according to the Internal Revenue Service. That essentially means expenses that are deemed medically necessary. Permitted expenses include surgery, prescribed medications, eyeglasses and braces. They don't include herbal supplements, exercise classes for general wellness or cosmetic procedures. The full list can be found in Publication 502 on the IRS's Web site www.irs.gov2.
 
Saving for Your Health
 
To get a health-savings account, individuals must first enroll -- either through an employer or on their own -- in a health-insurance plan with a high deductible.
 
Option 1
 
They then can sign up for their plan's HSA. Here are some health plans that offer HSAs:
PLANS SOLD TO EMPLOYERS
WHERE AVAILABLE
Aetna (aetna.com3) 800-US-AETNA
Nationally to employers with at least 51 employees.
Cigna Choice Fund (cigna.com4)
Nationally to firms with at least 200 workers beginning Jan. 1, 2005.
PLANS SOLD TO INDIVIDUALS
WHERE AVAILABLE
 
Assurant Health
(assuranthealthhsa.com/consumers.html5)
888-239-8917
44 states
 
Golden Rule (goldenrule.com6)
800-974-4472
25 states
 
 
 
 
 
           
           
Option 2
 
Or they can opt out of the high-deductible plan's HSA and get one through an independent provider. Here are a few providers:
 
HSA ALTERNATIVES
FEES
Entrust New Direction IRA (nd-hsa.com7)
303-546-7930
$65 set-up fee and $35 a year in administration fees. Offers wide range of investment options.
First HSA (1hsa.com8) 888-769-8696
$25 set-up fee for individual account.
eHealthInsurance HSA* (ehealthinsurance.com9)
800-977-8860
No set-up or maintenance fees for basic interest-bearing accounts. Investment accounts have monthly fees.
 
Note: For more options, visit www.hsainsider.com10
                       
Copyright 2004 Dow Jones & Company, Inc. All Rights Reserved.