Making Sense: University of Memphis Health Law Forum Speakers Decipher Sweeping Changes for Local Healthcare Professionals

LYNNE JETER

Making Sense: University of Memphis Health Law Forum Speakers Decipher Sweeping Changes for Local Healthcare Professionals | University of Memphis Health Law Forum, Baker Donelson, Sonnenschein

Nearly 100 local healthcare professionals representing nonprofit organizations, private companies, law firms and government entities gathered in late March for a day-long forum at the first annual University of Memphis Cecil C. Humphreys School of Law Health Law and Public Policy Symposium. The event, which was presented in partnership with the law firm of Baker Donelson Bearman Caldwell & Berkowitz PC, and sponsored by Baptist Memorial Health Care Corporation, Methodist Le Bonheur Healthcare and St. Jude Children's Research Hospital, was chock full of tidbits covering industry trends and regulatory changes in the Memphis medical landscape.

In his opening remarks, Kevin Smith, dean and Thomas B. Preston professor of law at the University of Memphis Cecil C. Humphreys School of Law, noted that hosting a major health law and public policy event is part of the university's commitment to furthering the city's reputation as a national player in the industry.

"As home to leading healthcare systems, medical device manufacturers, an emerging bioscience hub and other health-related organizations, Memphis is an epicenter of activity in the healthcare field, and the University of Memphis and its law school are committed to adding our resources to the city's significant talent and knowledge in this area. Our goal is to become an intellectual center in health law and public policy, and this symposium is a first step toward that goal."

Clinton D. Hermes, senior vice president and general counsel at St. Jude Children's Research Hospital, took over as moderator of the event, which focused on the healthcare ecosystem in transition with two different views.

The initial part of the program, led by Richard Cowart, chair of the Health Law and Public Policy Department at Baker Donelson, and Thomas Hyatt of Sonnenschein Nath & Rosenthal, focused on an overview of the marketplace, with a look at federal compliance for payors, the consolidation of hospitals and health systems, physician alignment strategies, post-acute integration initiatives and the heightened regulatory environment for the medical device and pharmaceutical sectors. The discussion then shifted to a view of the government side, with a look at tax-exempt healthcare from the beltway; the IRS, Congress and the community benefit standard; Schedule H; compensation of healthcare executives; and the rise of the activist state attorney general.

Cowart and Hyatt pointed to four of The ECRI Institute's list of technologies that healthcare executives should pay attention to as economic and regulatory pressures heat up:

Electronic health records, considered the most critical technology for improving safety and care delivery.
Magnetic resonance imaging, specifically the ultrahigh-field-strength MRI, a system with a 3.0 Tesla or stronger magnet for producing higher-quality images faster.
Physician preference items, which have continued to escalate in price, such as pacemakers, drug-eluting stents and hip and knee implants that can represent as much as half of a hospital's total supply cost.
Hybrid operating rooms, which allow physicians to perform both surgical and endovascular procedures.

Memphis Bioworks Foundation executive director Steven J. Bares, PhD, along with Hermes and Eric Loumeau of Bass Berry & Sims, presented the lifecycle of scientific progress in healthcare. Focusing on biomedical research, their talk addressed the regulation of basic, animal and clinical research by the National Institutes of Health and the Food and Drug Administration; the protection of research volunteers; contractual arrangements used to coordinate and conduct multi-site biomedical research; the importance of intellectual property protection; and the transfer of technology from research institutions to manufacturers.

In their discussion about healthcare and economic development, University of Memphis School of Public Health professors Lisa Klesges, PhD, and Marian Levy, PhD, provided insight into factors contributing to Tennessee's poor health status, health inequities and economic ramifications, compared to the rest of the nation.

Nationally, Kesges and Levy noted:

· Obese individuals have 36 percent higher healthcare costs and 77 percent higher medication costs, compared to individuals with normal weight.

· Americans could enjoy five to seven additional years of healthy life and avoid costs associated with chronic disease if prevention and healthy behavior were priorities.

· 95 percent of America's trillion-dollar healthcare industry goes to direct health services, while only 5 percent goes toward health promotion and improvement.

Kesges and Levy pointed out that 2009 healthcare spending totaled $2.5 trillion, up 5.7 percent from 2008, despite a decline in gross domestic product (GDP) in the same period. They also pointed out:

Healthcare's share of the economy grew 1.1 percent in 2009, to a projected 17.3 percent.
In health spending, there was an 8.7 percent growth to $1.2 trillion for public payers, and a 3 percent growth to $1.3 trillion for private payers.
Hospital spending rose 4.5 percent in 2008, and 5.9 percent in 2009, totaling $760.6 billion.
Physician and clinical services spending increased 5 percent in 2008, and 6.3 percent in 2009, totaling $527.6 billion.
Prescription drug spending climbed 3.2 percent in 2008, and 5.2 percent in 2009, totaling $246.3 billion.

Projections for 2019 place national health spending at $4.5 trillion—nearly double the 2009 tally—accounting for 19 percent of the GDP. Hospital spending and prescription drug spending are expected to nearly double to $1.4 trillion and $457.8 billion, respectively.

Tracing the rise in healthcare spending, 90 percent reflects sicker patients spending $1,000 or more annually, while 80 percent represents patients with largely predictable needs and expenses via chronic illness, they said.

Kesges and Levy pointed out the leading causes of death in the United States in 2000—heart disease, malignant neoplasm, cerebrovascular disease and chronic lower respiratory tract disease—and the actual causes of death in the United States in the 1990s—tobacco, poor diet and physical inactivity, alcohol consumption, and microbial agents. Of those four, the only cause of death that increased over time was poor diet and physical inactivity.

Citing local trends, Kesges and Levy noted:

Every year, Tennessee spends 22 percent more per capita on obesity than the national average—$1.84 billion caring for obesity and obesity-related complications, they noted, a dollar amount that doesn't reflect lost or decreased productivity or decreased quality of life resulting from the complications.
Tennessee ranks third in the nation for childhood obesity.
The state is fifth in the nation for overweight or obese children ages 10 to 17.

· Close to half of all Tennessee schoolchildren (43 percent) remain at risk for being overweight or obese.

· According to the Trust for America's Health in 2009, Tennessee places fourth in the nation for adult obesity (30.2 percent), nudging up from fifth place in 2007 (27.8 percent).

· With five years of investing $10 per person annually in strategic prevention programs, Tennessee would reduce health spending an estimated $351 million—a return on investment (ROI) of 6-to-1.

The afternoon session began with hot topics that elicited the most questions: health information management, electronic records and e-discovery.

Morris Landau, the HIPAA (Health Insurance Portability and Accountability Act of 1996) privacy officer at St. Jude, along with Mark Field of Evans Petree, and Clinton Sanko and Buckner Wellford of Baker Donelson, led a roundtable discussion that included two case studies and provided a basic overview of federal privacy laws protecting patient personal health information under HIPAA, including the significance of recent amendments to those laws passed as a part of ARRA (American Recovery and Reinvestment Act of 2009).

"These amendments offer financial incentives to healthcare providers who embrace the concept of the collection and sharing of patient information among providers through a secure network, but also impose significant obligations upon providers and their 'business associates' to safeguard patient health information," said Field. "The expansion of electronic records use also creates challenges to parties engaged in healthcare litigation with respect to the identification and retention of relevant information under e-discovery provisions in state and federal courts."

Bruce Merlin Fried led a session on healthcare reform, which Congress passed in April. "Whatever shape healthcare reform finally takes," said Fried, "it will have a profound impact on patients, hospitals and the way physicians practice medicine."

The symposium was capped by a leadership panel discussion featuring Saint Francis Healthcare CEO David Archer, St. Jude Children's Research Hospital CEO William E. Evans, MD, Baptist Memorial Health Care Corporation CEO Stephen C. Reynolds, and Methodist Le Bonheur Healthcare CEO Gary Shorb. The panelists shared their views on healthcare and public policy, focusing on how providers' and researchers' interactions with the government in the roles of payor, regulator, funder of science, and others have changed.

A Dean's Reception followed closing remarks by Clinton Hermes, Dean Kevin Smith and Steve West.