Vested Interest - News and Notes - September 2006 Issue

Doctor, Your Sponge is Beeping

Technology that helps airlines keep track of baggage and sounds an alarm when a shoplifter tries to leave a store may be able to stop surgeons from losing a sponge inside a patient. Doctors at Stanford University School of Medicine who tested sponges embedded with radio frequency identification tags said the system accurately alerted surgeons when they deliberately left a sponge inside a temporarily closed surgical site and waved a detector wand over it. But they said the size of the chips used – 20 millimeters or about 0.8 of an inch – was too large and would need to be reduced to be practical on sponges and surgical instruments. One earlier study found that medical personnel left foreign objects, most often sponges, inside a patient’s body in one out of every 10,000 surgeries causing complications and even death. (Reuters – July 17, 2006)

Drug Errors Injure More Than 1.5 Million a Year

More than 1.5 million Americans are injured every year by drug error in hospitals, nursing homes, and doctor’s offices, a count that doesn’t even estimate patients’ own medication mix-ups, says a report that calls for major steps to increase patient safety. Topping the list: All prescriptions should be written electronically by 2010, the Institute of Medicine said. At least a quarter of medication-related injuries are preventable. The report found that a hospitalized patient is subject to at least one medication error per day, and a preventable drug error can add more than $5,800 to the hospital bill of a single patient. Assuming that hospitals commit 400,000 preventable drug errors each year, thats $3.5 billion, not counting lost productivity and other costs, from hospitals alone. (AP – July 20, 2006)

Allstate Profits Rise 5%

Lower-than-expected claims costs and a healthy auto business helped lift Allstate’s second quarter profit 5 percent to $1.2 billion. Since Hurricanes Katrina and Rita, the company has cut back on catastrophe exposure in coastal New York and Florida and is discontinuing its earthquake coverage. Allstate also is able to identify the appropriate risk level for each auto insurance customer, so that customers who get into more accidents pay a higher rate, helping the auto business maintain profitability. Also helping the company’s second quarter results were favorable reserve releases, which occur when claims turn out to be less costly than originally thought. (Chicago Sun-Times – July 20, 2006)

Study Ties Epilepsy Drug to Fetal Risk

One in five women who took the widely used epilepsy drug valproate in a clinical trial had pregnancies resulting in birth defects or fetal death. The drug, sold as Depakote by Abbott Laboratories Inc., was substantially riskier to unborn children than three competing medicines examined in the study. The researchers found cases of malformed hearts and genitals, cleft palate and artery deformities among children born to women taking the drug. The report in the journal Neurology was the latest to document the potential dangers of valproate to fetuses. The drug is also used to treat headaches and some psychiatric conditions, including bipolar disorder. (ATLA Law News Digest – August 10, 2006)

Report: Lens Solution Caused Eye Infections

Federal disease control experts and leading eye doctors have formally concluded that Bausch & Lomb’s ReNu with MoistureLoc was the only contact lens solution contributing to an outbreak of potentially blinding fungal eye infections earlier this year. But the researchers’ report in the Journal of the American Medical Association, says it remains unclear how the product caused the problems. And an accompanying commentary by two academic researchers, meanwhile, argues that further study is needed to gauge the safely profile of all the various brands of “multipurpose” lens-care solutions on the market that, like MoistureLoc, are used for cleaning, storing and moistening soft contact lenses. (ATLA Law News Digest – August 24, 2006)

Emotional Damages Not Taxable in D.C. Circuit

A federal appeals court has ruled the federal government may not tax the money plaintiffs receive as compensation for emotional distress and other intangible injuries. The U.S. Court of Appeals for the District of Columbia Circuit struck down as unconstitutional a portion of the tax code that said only compensation for physical injuries is tax exempt. The ruling affects only Washington, D.C., but, depending on whether the IRS appeals to the Supreme Court or decides to adopt the finding nationwide, it could mean the end of tax bills following a variety of trials, from civil rights disputes to employment discrimination cases. The court sided with a women who paid $20,665 in taxes on a $70,000 judgment for emotional distress and injury to reputation following a 1994 whistleblower case against the New York Air National Guard. The court ruled that such awards were not income but “compensation for the loss of a personal attribute.” In that sense, they are akin to awards for physical injuries, which are tax exempt, the court said (AP – August 22, 2006)

Illinois Leads Nation in New Jobs Created

Illinois added more new jobs than any other state in July, creating 29,800 new jobs. The total number of new jobs created this year is almost 70,000, which is the best start to a year since 1998 and more new jobs than all Midwest states combined. The Illinois unemployment rate was 4.7 percent in July, falling lower than the national rate, 4.8 percent, for the second consecutive month. The Chicagoland area also reported its lowest unemployment rate for July since 1998. These statistics were compiled by the federal Bureau of Labor Statistics and the Illinois Department of Employment Security. For the full text of the news release, go Latest News on the ITLA website at www.iltla.com. (News Release – August 24, 2006)

Number of Doctor-Owned Hospitals Set to Rise

Doctor-owned hospitals are set to proliferate now that federal funding will become available again, but the prospect of more of these profitable niche facilities is getting a mixed reaction. Critics say these hospitals could skim off the most profitable patients from an already overburdened health care system, leaving it with the sickest and poorest clientele. Some also fear that doctor-owners could put their financial interests ahead of their patients. Meanwhile, proponents of the 200 or so doctor-owned hospitals in the U.S. say they are streamlining medical care, with their surgical centers practicing with Henry Ford-like efficiency. One reason the doctor-owned hospitals are thriving is that their specialties, often heart and orthopedic care, are better reimbursed by Medicare and private insurers, compared with ailments like the flu or chronic conditions. (Reuters – August 25, 2006)