Study Questions Government’s $1.3 Billion Stockpiling of Tamiflu® and Relenza®

Researchers at the Cochrane Collaboration and BMJ (formerly British Medical Journal) are questioning the U.S. government’s spending of $1.3 billion on stockpiling antivirals such as Tamiflu® and Relenza®, noting that there is no credible evidence demonstrating the two neuraminidase inhibitors lower hospital admissions and complications of influenza. While clinical trials showed that influenza-like symptoms in Tamiflu and Relenza takers were alleviated a half-day sooner than patients who took a placebo, the antivirals actually increased occurrences of nausea, vomiting, headaches, psychiatric disturbances, and renal events. Researchers also found that there was insufficient evidence to demonstrate Tamiflu and Relenza prevent person-to-person spreading of influenza.

“We now have the most robust, comprehensive review on neuraminidase inhibitors that exists,” said BMJ Editor-in-Chief David Tovey. “Initially thought to reduce [hospitalizations] and serious complications from influenza, the review highlights that Tamiflu is not proven to do this, and it also seems to lead to harmful effects that were not fully reported in the original publications. This shows the importance of ensuring that trial data are transparent and accessible.”

According to Cochrane and BMJ, the evidence that was previously presented to government agencies regarding Tamiflu and Relenza, which subsequently led to the expensive stockpiling of the antivirals, was incomplete. However, the Review, “Neuraminidase inhibitors for preventing and treating influenza in healthy adults and children,” involved 20 Tamiflu and 26 Relenza trials, involving over 24,000 people. “Drug approval and use cannot be based on biased or missing information any longer,” stated review authors Dr. Tom Jefferson, Dr. Carl Heneghan, and Dr. Peter Doshi. “We risk too much in our population’s health and economy. This updated Cochrane review is the first time a Cochrane systematic review has been based only on clinical study reports and regulator’s comments. It is the first example of open science in medicine using full clinical study reports available without conditions. And therefore the conclusions are that much richer. We urge people not to trust in published trials alone or on comment from conflicted health decision makers, but to view the information for themselves.”

According to Cochrane, “the review clearly recommends that guidance on the use of both neuraminidase inhibitors (oseltamivir and zanamivir) in the prevention or treatment of influenza should be revised to take account of the evidence of small benefit and increased risk of harms.” In addition, given the lack of evidence that supports original claims of the antivirals’ benefits, the review raised questions on whether stockpiling of the drugs is still justifiable.

Vermont’s Single Payer System Slow Down

On May 28, 2011, Gov. Peter Shumlin signed Act 48 into law, which calls for a three-stage implementation of a publicly-financed universal health care system by 2017. The goal of Act 48 is an eventual state-funded and operated single-payer system. It’s three years later, however, and what momentum the Act had is starting to slow down, especially as the Governor is expected to release the finance plan for the project.

Single Payer System Design.

Vermont’s move to a single payer system was designed to meet the federal requirements the Patient Protection and Affordable Care Act (P.L. 111-148) (ACA). In doing so, it may take advantage of federal monies targeted for Vermont’s Health Insurance Exchange and to petition for federal waivers that would streamline Vermont’s reform. The system should extend coverage to each of Vermont’s 620,000 residents while containing soaring health care costs.

Vermont’s plan establishes a state Health Insurance Exchange, as mandated by new federal health care laws, that will offer coverage from private insurers, state-sponsored and multi-state plans. It also will include tax credits to make premiums affordable for uninsured Vermonters. The exchange will be managed by a five-member board which sets reimbursement rates for health care providers and streamlines administration into a single, unified system. On the Exchange, Vermont residents and small employers will be able to compare rates from a variety of plans and enroll in the plan of their choice. Among the criteria are adoption of a financing plan by 2014; ensuring the new system costs less than the current fee-for-service one; and obtaining federal permission via a waiver to allow Vermont to proceed with the single-payer option, in around 2017.


There are many benefits to a single payer system. When the government owns and operates one health insurance plan for all residents, it sets a single price for each medical procedure. These prices tend to be lower because the government is negotiating one rate for all citizens. Administrative costs are also lower because there is no insurance company. Physicians send their bill to the federal government.


Of course, it’s not quite that easy – single payer system also has several problems. First, the government is the one to make difficult decisions about what benefits will and will not be covered. It could theoretically be up to the government to determine whether or not a patient will receive things like prescription drugs or dentist visits. Some single payer systems are associated with longer wait times for medical care, however a recent study by the Commonwealth Fund found that while some single payer systems have longer wait times, others see patients quicker than here in the United States.

Pause in the Process.

Under Act 48, Governor Shumlin was required last year to outline some financing options for lawmakers to consider but that has yet to be done.  The legislation required that the state provide an outline on how it plans to raise the estimated $1.7 billion to $2.2 billion to finance the future single payer system. At the beginning of the current legislative session, the governor said a menu of financing options would be released in April for legislators to discuss. Now, Governor Shumlin says he will wait until 2015 for the release. Despite the delay in developing the financing plan for the state’s single payer system, Shumlin said in a recent interview that he still thinks there’s enough time to meet his target date of 2017 for Vermont to become the first state in the country to implement a single payer health care system.

“I believe that we will collectively come to the same conclusion, that moving to a system where you spend less money for better quality and better outcomes,” said Shumlin. “Combined with a payment system where we all, based on our ability to pay, (will) lead to prosperity and an affordable quality health care system for all.”

He offered a slightly different reason for the stall in another interview last February, when he said the decision to delay unveiling the finance options was made over the past several weeks. “We have a very good business advisory group … that’s helping us to put together a package that will work for Vermonters as well as for businesses,” he said. “As we’ve gotten into the weeds of the various details that need to be ready to lay out a menu of options, there’s pretty broad agreement that we’re just not there yet.” Either way, it’s clear Vermont needs more time.

Fresh Faces to Figure Things Out.

Governor Shumlin has made some new hires to help him with figuring out details for the Exchange. Agency of Commerce and Community Development (ACCD) Secretary Lawrence Miller will become Senior Advisor to the Governor and Chief of Health Care Reform, where he will be tasked with overseeing the state’s health care reform efforts and transition to Green Mountain Care. He will report directly to the governor. Patricia Moulton will replace Vermont Administration Secretary Lawrence Miller when he moves up to advise the Governor.

In a recent interview, Miller commented, ““We know that concern about health benefits holds people back from striking out on their own and starting new businesses, and it keeps people locked in jobs for the wrong reasons…Health insurance is also a huge cost factor for all enterprises, including our schools.  We obviously have to do something different. I am encouraged that Vermont’s efforts at cost containment are beginning to bear fruit, and I am ready to help move us forward.”

Global Budget Payment.

Recent reports indicate that at least one hospital in the state will begin testing a “global budget payment” system. Global budgets are set payments determined by state regulators to care for the population a hospital serves, as opposed to the hospital billing for each individual service it provides. With this program, if the hospital exceeds its budget it loses money. The budget is based on the hospital’s historic revenue with adjustments for inflation and changes within the population it serves.

For more information on health reform in Vermont, please see Michelle Oxman’s post, “Highlight on Vermont: Implementing the ACA on the Road to a Single Payer System,” from February, 2014. She reviews the struggles Vermont is having with its Health Insurance Exchange and the state’s struggle to provide coverage for its uninsured population, which is the highest in the country.

Official Testifies About HRSA’s Health Workforce Investments, Goals, Successes

On April 9, 2014, Rebecca Spitzgo, Associate Administrator of the Bureau of Health Professions in the Health Resources and Services Administration (HRSA), testified before a Senate Subcommittee on Primary Health and Aging regarding the nation’s primary care workforce needs and HRSA’s activities and in this area. In light of recent investments from the American Reinvestment Recovery Act of 2009 (ARRA) (P.L. 111-5) and the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148), Spitzgo’s testimony focused on: (1) recent investments to strengthen the primary care workforce; (2) new efforts to build a primary care workforce; (3) diversity programs; and (4) training for comprehensive primary care.

HRSA’s Mission and Focus

An agency of HHS, HRSA is the primary federal agency for improving access to health care services for people who are uninsured, isolated or medically vulnerable. HRSA was created in 1982, when the Health Resources Administration and the Health Services Administration were merged. Its stated mission is to improve health and achieve health equity through access to quality services, a skilled health workforce, and innovative programs. In its efforts to strengthen the health care workforce, HRSA’s workforce programs emphasize the training of the next generation of primary care providers, strengthening up the primary care training and development infrastructure, providing incentives for students to choose primary care and to practice where the Nation needs them most, and repaying loans for primary care providers willing to work in some of the Nation’s most underserved areas.

Recent Investments to Strengthen the Primary Care Workforce

In her testimony, Spitzgo stated that, to date, ACA and ARRA investments have resulted in:

  • the training of an additional 1,700 primary care providers, including physicians, advanced practice nurses, and physician assistants, as well as 200 behavioral health providers;
  • the doubling of the numbers of clinicians in the National Health Service Corps (NHSC) from 3,600 in 2008 to nearly 8,900 in 2013; and
  • nearly 1,600 advanced practice nurses in the NHSC and nearly 2,600 nurses in the NURSE Corps working in high need communities.

Spitzgo also noted that the ACA provides $230 million over five years to fund the Teaching Health Center Graduate Medical Education (GME) program, which has expanded residency training for primary care residents and dentists in community-based ambulatory patient care settings, including HRSA-funded health centers. According to Spitzgo, this program supported more than 300 primary care resident full-time equivalents (FTEs) in 21 states in academic year 2013-2014, and is expected to support nearly 600 FTEs in academic year 2014-2015.

New Efforts to Build a Primary Care Workforce

Spitzgo testified as to the several new programs and initiatives to build a better primary care workforce contained in the President’s FY 2015 Budget, including:

  • A workforce initiative to support the training of 13,000 new physicians by 2024 and grow NHSC clinicians from 8,900 in 2013 to 15,000 in by FY 2015.
  • A new residency program, the Targeted Support for GME program, will build on the Teaching Health Center GME program, focusing on residency training in ambulatory, preventive care delivered in team-based settings. This new program includes a $100 million set aside for children’s hospitals in FYs 2015-2016, to be distributed via formula that will continue to support the same types of disciplines currently funded through the Children’s Hospitals GME Payment program.
  • Continued support of the NHSC.
  • A new $10 million Clinical Training in Interprofessional Practice program, which will support community-based clinical training in interprofessional, team-based care setting.
  • $4 million for the Rural Physician Training Grant program to provide support for medical schools to recruit and train students interested in rural practice.

Diversity Programs

In her testimony, Spitzgo stressed HRSA’s success in facilitating a diverse healthcare workforce. She offered the following statistics:

  • Underrepresented minorities and individuals from disadvantaged backgrounds accounted for approximately 45 percent of those who completed HRSA’s health professions training and education programs during 2012-2013.
  • More than half of the nearly 1,100 NHSC scholars and residents in the pipeline are minorities.
  • In FY 2013, African American physicians represented 17.8 percent of the Corps physicians, which exceeds their 6.3 percent representation within the national physician workforce.
  • In FY 2013, Hispanic physicians represented 15.7 percent of the Corps physicians, exceeding their 5.5 percent representation in the national physician workforce.

Training for Comprehensive Primary Care

Spitzgo’s testimony focused on HRSA investments to support the behavioral health disciplines and the integration of oral health into primary care. With regard to behavioral health, she noted that:

  • NHSC providers (including health service psychologists, licensed clinical social workers, licensed professional counselors, marriage and family therapists, and psychiatric nurse specialists) have increased from 700 in 2008 to 2,440 in 2013.
  • If they count psychiatrists, psychiatric physician assistants, and psychiatric nurse practitioners, more than 2,800 out of nearly 8,900 clinicians in NHSC (as of September 30, 2013) provide behavioral health services.
  • A partnership between HRSA and the Substance Abuse and Mental Health Services Administration (SAMHSA) will train and provide placement assistance for approximately 1,800 additional behavioral health professionals and 1,700 behavioral health paraprofessionals.

Spitzgo further testified that HRSA funds several programs that support training and education necessary to improve the integration of dental care into primary care. Sptizgo also noted that approximately 75 percent of the more than 1,300 dentists and dental hygienists in NHSC work at health centers or health center look-alikes.

Grassley Questions IRS on Status of ACA Tax-Exempt Hospital Provisions

Although nonprofit hospitals must be in compliance with requirements related to community benefit, financial assistance for low-income and uninsured individuals, billing and collection practices, and emergency medical care under provisions of the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148), the Internal Revenue Service (IRS) and the Department of Health and Human Services (HHS) have fallen behind in implementing guidance for nonprofit hospitals and reporting to Congress. In an April 4, 2014,  letter to John Koskinen, IRS Commissioner, Senator Charles Grassley (R-Iowa) requested information on the status of several of the measures included in the law after noting that the IRS has not implemented all of the ACA requirements and the IRS and HHS have not issued annual reports on nonprofit hospitals to Congress for fiscal years 2012 or 2013 as required by the ACA.

ACA Provisions and Proposed Regulations

Grassley began a review of nonprofit hospitals in 2005 that revealed that “the practices of many of these hospitals were virtually indistinguishable from their for-profit counterparts.” Among Grassley’s findings were that some of the hospitals were providing very little charitable care or other community benefits, failing to publicize charitable care to patients, charging indigent uninsured patients more than insured patients, and using very aggressive collection practices. The ACA provisions, which arose from Grassley’s review, imposed standards for the tax-exemption of nonprofit hospitals for the first time,” according to the news release.

Section 9007 of ACA, which added 501(r) to the Internal Revenue Code (Code) requires the IRS to establish more oversight of nonprofit hospitals and hold hospitals accountable for their tax-exempt status. Under 501(r), 501(c)(3) organizations that operate one or more hospital facilities (hospital organizations) are required to meet four general requirements on a facility-by-facility basis, which except for the community needs assesment became effective for tax years beginning after March 23, 2010:

  • Community health needs assessment: For tax years beginning after March 23, 2012, hospitals must conduct a community health needs assessment (CHNA) and adopt an implementation strategy at least once every three years. The ACA also added Code sec. 4959, which imposes an excise tax of $50,000 for failure to meet the CHNA requirements, and added reporting requirements under Code sec. 6033(b), which requires the IRS to analyze the CHNA report.
  • Financial assistance and emergency care policies: Establish and make public financial assistance policy (FAP) and emergency medical care policies.
  • Limitation on charges for individuals who qualify for financial assistance: Limit amounts charged for emergency or other medically necessary care to individuals eligible for assistance under the hospital’s financial assistance policy.
  • Collections procedures: Make reasonable efforts to determine whether an individual is eligible for assistance under the hospital’s financial assistance policy before engaging in extraordinary collection actions against the individual.

Although these requirements may have existed in one form or another before, the ACA formally put the requirements into the tax Code and provided for specific penalties for noncompliance. In addition to the requirements for nonprofit hospitals, Sec. 9007 requires the IRS and HHS to ensure that nonprofit hospitals are in compliance with the law and report to Congress annually on the effectiveness of the provisions.

The IRS issued proposed regulations (77 FR 38148) on June 26, 2012, which provided guidance for establishing and publicizing the FAP as well as clarification of the written emergency care policy requiring hospitals to provide care for emergency medical conditions to individuals without discrimination (within the meaning of the Emergency Medical and Active Labor Act (EMTALA) regardless of whether they are eligible for financial assistance. It also addressed the prohibition of certain collection methods until the hospital makes reasonable efforts to determine whether an individual is eligible for financial assistance and the limitation on charges. The 2012 proposed rule did not address CHNA; however, on April 5, 2013, the IRS issued a proposed rule (78 FR 20523) addressing CHNA requirements and the related reporting obligations under sec. 6033 and excise tax under sec. 4959.

The IRS issued Notice 2014-2 (reliance on proposed regulations for tax-exempt hospitals) and Notice 2014-3 (providing guidance regarding correction and disclosure procedures for hospital organizations to follow so that certain failures to meet the requirements of sec. 501(r) will be excused) announcing that hospitals could rely on all of the provisions of the proposed regulations issued in 2012 and 2013 pending publication of final or temporary regulations or other applicable guidance. In addition hospitals may rely on reg. sec. 1.501(r)(3) of the 2013 proposed regulation for any CHNA conducted or implementation strategy adopted on or before the date that is six months after final or temporary instructions are published.

Request for Status

Grassley stated that the IRS and HHS’ failure to provided Congress with access to the information required to be reported by law “raises serious concerns both about the oversight of nonprofit hospitals and the government’s ability to faithfully execute laws passed by Congress.”  He has requested the IRS Commissioner to provide information regarding the status of (1) a Memorandum of Understanding (MOU) between the IRS and HHS, recommended in 2012 by the Treasury Inspector General for Tax Administration, but not finalized; (2) the annual reports; and (3) regulations implementing the provisions of ACA for nonprofit hospitals. He also requested information regarding the IRS’ reviews of the community benefit activities of nonprofit hospitals, including how many hospitals had been reviewed and the results of the review in terms of compliance. According to Grassley, the IRS and HHS’ failure to provided Congress with access to the information required to be reported by law “raises serious concerns both about the oversight of nonprofit hospitals and the government’s ability to faithfully execute laws passed by Congress.”