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GM Bankruptcy Plan Would Use Stock Worth 39% Of Firm To Fund Half Of VEBA Obligation
General Motors and United Auto Workers on Thursday agreed to a tentative deal that would allow the automaker to use company stock to fund half of its obligation to a retiree health care fund, the Washington Post reports (Cho et al., Washington Post, 5/22). According to the terms of temporary loans granted by the government in 2008, GM must present a plan for restructuring its finances by June 1 or else enter bankruptcy protection (Krisher, AP/Philadelphia Inquirer, 5/22).UAW in 2007 agreed to establish a voluntary employees" beneficiary association, totaling $35 billion, that would cover health care costs of retired GM workers and their spouses starting in 2010. GM so far has paid about $15 billion into the fund (Kaiser Daily Health Policy Report, 5/15). Under the potential deal, GM would fund its remaining $20 million obligation to the VEBA with $10 billion in cash paid over time. The rest would come in the form of company stock that would give UAW as much as a 39% stake in the restructured firm (Merx/Green, Bloomberg, 5/21). The deal is similar to one at Chrysler, in which UAW agreed to accept 55% of Chrysler"s stock in exchange for about $6 billion of the $10.6 billion the automaker owed to the VEBA (AP/Philadelphia Inquirer, 5/22).Under the GM deal, the union also would get a seat on the company"s board (Stoll/Terlep, Wall Street Journal, 5/22). Retirees would lose coverage of dental care and some prescription drugs, according to people with knowledge of the talks (Bloomberg, 5/21).UAW officials on Tuesday will meet in Detroit to discuss terms of the agreement and are expected to give their approval. The plan would then be presented to the union"s 60,000 GM workers for ratification (Wall Street Journal, 5/22).

Ethicon Endo-Surgery Studies Presented At DDW Demonstrate Potential Of Pure NOTES Surgery With Company's Toolbox
Ethicon Endo-Surgery, Inc. announced that multiple studies presented at the 2009 Digestive Disease Week (DDW) demonstrate the company"s novel, investigational Toolbox enables natural orifice translumenal endoscopic surgery (NOTES) procedures without laparoscopic support in porcine models. One of the studies concluded that a new adaptable minimally-invasive surgical platform for NOTES and single-site laparoscopy (SSL) was successfully used to complete a variety of key surgical activities critical to pure natural orifice surgery and SSL.
News of the day
11 West African Countries To Partake In Polio Vaccination Campaign; Benin Campaign Postponed Due To Health Worker Strike
A health workers" strike has caused Benin to indefinitely delay a polio vaccination campaign, part of a regional effort taking place in several West African countries, IRIN reports. The Benin campaign was due to start on May 29.
Nutrition

Premier Healthcare Alliance, GNYHA Ventures Identify More Than $317 Billion In Hospital Cost Savings

In a letter sent to President Obama and House and Senate leaders today, the Premier healthcare alliance and GNYHA Ventures, Inc., Greater New York Hospital Association"s supply chain enterprise that includes group purchasing organizations (GPOs), said that hospitals could improve healthcare quality and achieve cumulative savings of $317 billion if certain policies are enacted to create a more competitive and transparent purchasing environment. The savings are based on an analysis conducted by the two groups and projected over 10 years, to be fully realized by 2019. Premier and GYNHA Ventures identified the savings opportunities by analyzing information from the Premier Perspective™ database, the nation"s largest and most detailed clinical, financial and outcomes database, containing information for one out of every five - or 210 million - patient discharges in the United States. Further savings were identified by analyzing real-world lessons learned from GYNHA Ventures hospitals, including those participating in Premier"s quality and cost improvement collaboratives such as the Hospital Quality Incentive Demonstration (HQID) and the QUEST: High Performing Hospitals initiative. "As the largest national alliance of hospitals working on the front lines to improve the quality and reduce the cost of healthcare, the Premier healthcare alliance is in a unique position to identify healthcare savings opportunities," said Susan DeVore, Premier"s incoming president and CEO. "Through our work, we have learned firsthand that sizable savings can be achieved without compromising patient care. These savings will serve as a down payment to help our nation pay for comprehensive healthcare reforms that improve quality, affordability and access to care." "Quite simply, we do not believe that healthcare supply costs need to increase," said GNYHA Ventures President Lee Perlman. "Through sound policy and a commitment to transparent purchasing practices, group purchasing organizations can contribute significantly to slowing the growth of healthcare spending." Specifically, savings opportunities identified by Premier and GNYHA Ventures include: - Improved alignment between physicians and hospitals - Allowing shared savings programs would align hospital and physician financial incentives to achieve greater consistency and standardization of medical products, which would improve the quality of care and provide more value to healthcare purchasers. If properly structured, 2-4% a year of the approximately $57 billion that is spent annually on physician preference items, such as cardiovascular, orthopedics, spine, intraocular, ophthalmic, ear and other devices, could be saved through improved physician and hospital alignment, yielding 10-year cumulative savings of $68-$128 billion. - Transparency in payments to physicians by manufacturers - Requiring manufacturers of drugs, devices and medical supplies to publicly report financial relationships with physicians would help expose payments that could create conflicts of interest. These conflicts can encourage inappropriate and more costly care, such as the greater use of more expensive branded drugs rather than equally effective generics. - Removal of price confidentiality contracts - Publicly disclosed prices would provide hospitals with the necessary information to engage with physicians in making informed, evidence-based decisions, while tracking outcomes to ensure quality of care. Further, disclosure of price points would improve hospitals" ability to negotiate with manufacturers to reduce costs. The power of this type of collaboration is evident in the $36 billion in annual savings achieved through hospitals and clinicians working with GPOs to aggregate supply purchasing and improve systems and processes that maximize efficiency, labor and expenses. - FDA evidence-based oversight of reprocessing - FDA currently provides oversight and regulates the reprocessing of single-use devices (SUDs). Despite FDA regulation, many hospitals do not reprocess SUDs because of the single-use label. FDA could require manufacturers to show evidence that a medical device is unable to reused, including studies that indicate reuse would render the device unsafe. - Allowing follow-on biologics - Granting manufacturers of biologic products a set number of years of market exclusivity, similar to one that makers of traditional drugs already have, would allow follow-on biologics manufacturers to enter the market and compete to drive down prices. The Congressional Budget Office estimates that follow-on biologics will produce a savings of at least $5.9 billion ($6.6 billion if increased tax revenues are included) over 10 years. - Implementation of unique device identification - The creation of a national unique device identification (UDI) system is a large, critical piece to fully recognizing savings and improving patient safety. According to a recently updated Efficient Consumer Response study entitled "Improving the Efficiency of the Healthcare Supply Chain," $16 billion in annual savings are projected from the adoption of universal product numbers and the identification of standards for electronic data interchange and bar coding. - Comparative effectiveness research - Comparative effectiveness research will lay the foundation to produce information that will help healthcare providers and patients evaluate medical innovations and determine which represent added value, which fail to offer enhancements to current choices and which treatments work for some patients and not for others. This will enable the provider community to take the findings and drive greater market competition. Premier Inc.


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