Some companies penalize for health risks
Sun, 09 Sep 2007 18:03:46 GMTBy LISA CORNWELL, Associated Press Writer
CINCINNATI - First they tried nudging. Now companies are penalizing workers who have high health risks such as obesity and high blood pressure or cholesterol as insurance costs climb.
Lee Morrison, 51, doesn't mind the push, which came in the form of added insurance charges from his employer, Western & Southern Financial Group.
"I knew if I wanted to be healthier and pay less, it was up to me to do something about it," said Morrison, who has lost 54 pounds and lowered his body mass index enough to earn refunds the past two years.
A small number of companies have linked health factors to what employees pay for benefits, but the practice is expected to grow now that some federal rules have been finalized, spelling out what's allowed by law. Employee advocates worry that other anti-discrimination laws such as the Americans with Disabilities Act won't cover the person who is 20 or 30 pounds overweight.
The businesses are deducting from employees' paychecks, adding insurance surcharges or offering insurance discounts or rebates only to low-risk workers.
"Employers know they have to do something," said Garry Mathiason, a senior partner at the national employment and labor law firm Littler Mendelson, based in Boston. "I believe that in just the next two years more employers will turn to penalties to change employee behavior."
Mathiason said more than 300 companies have sought advice on creating more aggressive wellness programs since the firm released a study in April on legal issues and trends associated with requiring healthy practices.
Health care spending in the United States is estimated to reach $2.2 trillion this year, with at least 54 percent of spending in the private sector, and is expected to nearly double by 2016, according to the National Coalition on Health Care.
A 2003-2004 National Health and Nutrition Examination Survey showed about two-thirds of adults in the United States were overweight and almost one-third were obese. A U.S. surgeon general's report said health care costs of obesity totaled more than $117 billion in 2000.
More employers have charged higher insurance premiums the past few years for tobacco-using employees. Otherwise, wellness programs had been primarily voluntary, offering in-house fitness centers and free health screenings, for instance.
But many employees of Indianapolis-based Clarian Health didn't use the programs, hospital spokesman James Wide said.
In 2009 the company will start reducing pay for employees in its health plan by $10 per paycheck if their BMI — a measurement of body fat through a height and weight ratio — is in the obese range of more than 29.9. The deduction will be $5 per check if they don't meet required cholesterol, blood pressure or blood glucose measurements. Workers will be required to complete an annual health risk assessment and can appeal to have their fees dropped if they show improvement.
"We want more people to participate so that they can take control of their health," Wide said.
Some workers and employee advocates say companies are intruding in workers' private lives.
The National Workrights Institute says employers adopting the charges are trying to control private behavior and amassing huge amounts of personal health information.
"It's a backdoor approach to weeding out expensive employees," legal director Jeremy Gruber said.
Employers wary of risking legal problems feel more confident after federal regulations were finalized July 1 covering how wellness programs can comply with nondiscrimination requirements under the Health Insurance Portability and Accountability Act. Rewards based on health factors cannot exceed 20 percent of the total cost of employee health coverage.
Employers also are warned that they must consider other federal and state laws, including the ADA.
Businesses acknowledge they are trying to cut health care costs but say they also want to help employees get healthier. Each company determines what qualifies as high risk, but they generally follow traditional health standards.
Cincinnati-based Western & Southern Financial Group adds between $15 and $75 monthly to the insurance cost of health plan participants according to their BMI scores. A fitness center, weight loss programs and health screenings are provided, and employees reducing their BMI receive refunds, said Noreen Hayes, senior vice president of human resources.
Fifteen percent of employees who paid surcharges in 2006 received refunds this year, and about 40 percent of employees in the company's health plan pay the charges.
The surcharges help cover some of the costs the company incurs as a result of those employees' conditions, Hayes said.
Roselyn Bryant, 61, of Cincinnati, doesn't face any of the health risks but still is glad that the bank where she works in the mail department doesn't charge for them.
"I think it's too harsh to charge people for things they can't always control" she said.
Helen Darling, president of the National Business Group on Health, representing more than 200 of the nation's largest employers, thinks most employers prefer positive incentives.
"I think it's a mistake to use penalties for something as complicated as maintaining weight in a society that does everything to make you inactive," she said. "It can make people mad, and we are in a war for talent."
Scott's Miracle-Gro Co., a lawn and garden company based in Marysville, Ohio, charges $40 more per month in health premiums for employees who don't complete annual risk assessments. The company charges $65 more for workers who don't try to reduce any high health risks that show up.
"We think that personal accountability is a big part of driving overall wellness, but we also provide our associates with the tools they need," spokesman Jim King said. "We think our program is a good balance of the carrot and the stick."
King said participation rose from 70 percent to 95 percent after the charge was added.
Scott's earlier stopped hiring tobacco users in states where that is allowed and reserves the right to fire employees who use tobacco.
A Brookfield, Wis.-based financial information services and technology company uses rebates.
Fiserv Inc. offers a $35 monthly rebate to full-time employees in its health plan who complete health assessments and $25 rebates for spouses. Those at high risk for a chronic disease such as diabetes must participate in a disease management program to get the rebate, company spokeswoman Lori Stafford said.
Linda Cushman, health care strategist with the human resources consulting firm Hewitt Associates, said that whatever methods employers use, more employers are focusing on health risks such as obesity.
"Employers are paying the lion's share of health care costs and feel that they have the right to call the shots," Cushman said.
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On The Net:
Clarian Health: http://www.clarian.org
Littler Mendelson: http://www.littler.com
Ark. obesity report cards scaled back
Sun, 09 Sep 2007 20:16:21 GMTBy ANDREW DeMILLO, Associated Press Writer
LITTLE ROCK, Ark. - Teenager Jeffery Trimble used to wolf down as many as six cheeseburgers in a day and wasn't worried about being overweight. But then his school sent home an obesity report card.
"They let me know that I was at risk of having things like diabetes and a heart attack if I kept going the way I was," Jeffery said. "I knew I was overweight, but I didn't know how bad it could be."
The 16-year-old Jeffery changed his diet, started exercising and dropped 35 pounds.
Four years ago, Arkansas became the first state in the nation to track the number of overweight students in its schools. School officials say it has helped improve the state's childhood obesity rate, and a new report due Monday is expected to show that more Arkansas school children are winning their own battle of the bulge.
Health researchers, however, fear recent changes to the law could tip the scales the other way. Students will be weighed only every two years and it's now easier for parents to take them out of the program.
"The risk is that many parents who needed that screening information will now opt out," said Wendy Ward-Begnoche, a pediatric psychologist at Arkansas Children's Hospital. "Parents often underestimate the weight status of their child."
Arkansas' initial law, pushed by former Gov. Mike Huckabee, called on schools to measure students each year and report to their parents whether pupils were overweight or were at risk of becoming overweight. Huckabee, now a Republican presidential candidate, championed the program as he lost more than 100 pounds after being diagnosed with diabetes.
Some parents and legislators complained that putting into words what was obvious from afar — that some kids are overweight — was hurting some children's self-esteem. Legislators this year considered scrapping the program entirely but then voted to reduce the number of weigh-ins and make it easier for students to leave the testing program.
State health officials defend the changes, saying that cutting the number of children who are tracked doesn't mean the state is turning its back on efforts to combat childhood obesity.
Jim Raczynski, dean of the University of Arkansas for Medical Sciences' College of Public Health, said the reliability of the reports will now depend on the number of students who don't want their body mass index tracked.
"If the children that opt out — or the parents who opt out — are the more overweight children, the data will be skewed," Raczynski said. "It will look like there are fewer overweight children when in fact there aren't."
Last year, a study showed that the percentage of Arkansas children who were overweight or at risk of becoming overweight was 37.5 percent, down from 38.1 percent in 2004. University figures from a later study showed that 68 percent of parents and 85 percent of students said they were comfortable with the reports.
When Arkansas adopted the BMI testing program, the state ranked third in the nation in obesity, according to the Centers for Disease Control and Prevention. Many states have adopted their own testing programs.
Jeffery, a student at Little Rock Central High School, said he was initially uncomfortable with being weighed at his school each year. A BMI report that listed him as obese motivated him to cut down on the cheeseburgers, pizza and other junk food items that he said were staples of his diet, and he exercises on a nearly daily basis.
"Now I know it's OK to eat those things, but only moderately," he said. "It was nothing for me to eat six cheeseburgers in a day."
Arkansas Surgeon General Joe Thompson said the state will still be able to reach out to children like Jeffery with its BMI report cards and through other measures, such as limits on junk food sales at schools.
"After four years of reporting to every parent, we are transferring some of the responsibility back to the parents," Thompson said. "That's an imbalance that's OK."
Chip implants linked to animal tumors
Sun, 09 Sep 2007 11:35:33 GMTBy TODD LEWAN, AP National Writer
When the U.S. Food and Drug Administration approved implanting microchips in humans, the manufacturer said it would save lives, letting doctors scan the tiny transponders to access patients' medical records almost instantly. The FDA found "reasonable assurance" the device was safe, and a sub-agency even called it one of 2005's top "innovative technologies."
But neither the company nor the regulators publicly mentioned this: A series of veterinary and toxicology studies, dating to the mid-1990s, stated that chip implants had "induced" malignant tumors in some lab mice and rats.
"The transponders were the cause of the tumors," said Keith Johnson, a retired toxicologic pathologist, explaining in a phone interview the findings of a 1996 study he led at the Dow Chemical Co. in Midland, Mich.
Leading cancer specialists reviewed the research for The Associated Press and, while cautioning that animal test results do not necessarily apply to humans, said the findings troubled them. Some said they would not allow family members to receive implants, and all urged further research before the glass-encased transponders are widely implanted in people.
To date, about 2,000 of the so-called radio frequency identification, or RFID, devices have been implanted in humans worldwide, according to VeriChip Corp. The company, which sees a target market of 45 million Americans for its medical monitoring chips, insists the devices are safe, as does its parent company, Applied Digital Solutions, of Delray Beach, Fla.
"We stand by our implantable products which have been approved by the FDA and/or other U.S. regulatory authorities," Scott Silverman, VeriChip Corp. chairman and chief executive officer, said in a written response to AP questions.
The company was "not aware of any studies that have resulted in malignant tumors in laboratory rats, mice and certainly not dogs or cats," but he added that millions of domestic pets have been implanted with microchips, without reports of significant problems.
"In fact, for more than 15 years we have used our encapsulated glass transponders with FDA approved anti-migration caps and received no complaints regarding malignant tumors caused by our product."
The FDA also stands by its approval of the technology.
Did the agency know of the tumor findings before approving the chip implants? The FDA declined repeated AP requests to specify what studies it reviewed.
The FDA is overseen by the Department of Health and Human Services, which, at the time of VeriChip's approval, was headed by Tommy Thompson. Two weeks after the device's approval took effect on Jan. 10, 2005, Thompson left his Cabinet post, and within five months was a board member of VeriChip Corp. and Applied Digital Solutions. He was compensated in cash and stock options.
Thompson, until recently a candidate for the 2008 Republican presidential nomination, says he had no personal relationship with the company as the VeriChip was being evaluated, nor did he play any role in FDA's approval process of the RFID tag.
"I didn't even know VeriChip before I stepped down from the Department of Health and Human Services," he said in a telephone interview.
Also making no mention of the findings on animal tumors was a June report by the ethics committee of the American Medical Association, which touted the benefits of implantable RFID devices.
Had committee members reviewed the literature on cancer in chipped animals?
No, said Dr. Steven Stack, an AMA board member with knowledge of the committee's review.
Was the AMA aware of the studies?
No, he said.
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Published in veterinary and toxicology journals between 1996 and 2006, the studies found that lab mice and rats injected with microchips sometimes developed subcutaneous "sarcomas" — malignant tumors, most of them encasing the implants.
• A 1998 study in Ridgefield, Conn., of 177 mice reported cancer incidence to be slightly higher than 10 percent — a result the researchers described as "surprising."
• A 2006 study in France detected tumors in 4.1 percent of 1,260 microchipped mice. This was one of six studies in which the scientists did not set out to find microchip-induced cancer but noticed the growths incidentally. They were testing compounds on behalf of chemical and pharmaceutical companies; but they ruled out the compounds as the tumors' cause. Because researchers only noted the most obvious tumors, the French study said, "These incidences may therefore slightly underestimate the true occurrence" of cancer.
• In 1997, a study in Germany found cancers in 1 percent of 4,279 chipped mice. The tumors "are clearly due to the implanted microchips," the authors wrote.
Caveats accompanied the findings. "Blind leaps from the detection of tumors to the prediction of human health risk should be avoided," one study cautioned. Also, because none of the studies had a control group of animals that did not get chips, the normal rate of tumors cannot be determined and compared to the rate with chips implanted.
Still, after reviewing the research, specialists at some pre-eminent cancer institutions said the findings raised red flags.
"There's no way in the world, having read this information, that I would have one of those chips implanted in my skin, or in one of my family members," said Dr. Robert Benezra, head of the Cancer Biology Genetics Program at the Memorial Sloan-Kettering Cancer Center in New York.
Before microchips are implanted on a large scale in humans, he said, testing should be done on larger animals, such as dogs or monkeys. "I mean, these are bad diseases. They are life-threatening. And given the preliminary animal data, it looks to me that there's definitely cause for concern."
Dr. George Demetri, director of the Center for Sarcoma and Bone Oncology at the Dana-Farber Cancer Institute in Boston, agreed. Even though the tumor incidences were "reasonably small," in his view, the research underscored "certainly real risks" in RFID implants.
In humans, sarcomas, which strike connective tissues, can range from the highly curable to "tumors that are incredibly aggressive and can kill people in three to six months," he said.
At the Jackson Laboratory in Maine, a leader in mouse genetics research and the initiation of cancer, Dr. Oded Foreman, a forensic pathologist, also reviewed the studies at the AP's request.
At first he was skeptical, suggesting that chemicals administered in some of the studies could have caused the cancers and skewed the results. But he took a different view after seeing that control mice, which received no chemicals, also developed the cancers. "That might be a little hint that something real is happening here," he said. He, too, recommended further study, using mice, dogs or non-human primates.
Dr. Cheryl London, a veterinarian oncologist at Ohio State University, noted: "It's much easier to cause cancer in mice than it is in people. So it may be that what you're seeing in mice represents an exaggerated phenomenon of what may occur in people."
Tens of thousands of dogs have been chipped, she said, and veterinary pathologists haven't reported outbreaks of related sarcomas in the area of the neck, where canine implants are often done.
Nonetheless, London saw a need for a 20-year study of chipped canines "to see if you have a biological effect." Dr. Chand Khanna, a veterinary oncologist at the National Cancer Institute, also backed such a study, saying current evidence "does suggest some reason to be concerned about tumor formations."
Meanwhile, the animal study findings should be disclosed to anyone considering a chip implant, the cancer specialists agreed.
To date, however, that hasn't happened.
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The product that VeriChip Corp. won approval for use in humans is an electronic capsule the size of two grains of rice. Generally, it is implanted with a syringe into an anesthetized portion of the upper arm.
When prompted by an electromagnetic scanner, the chip transmits a unique code. With the code, hospital staff can go on the Internet and access a patient's medical profile that is maintained in a database by VeriChip Corp. for an annual fee.
VeriChip Corp., whose parent company has been marketing radio tags for animals for more than a decade, sees an initial market of diabetics and people with heart conditions or Alzheimer's disease, according to a Securities and Exchange Commission filing.
The company is spending millions to assemble a national network of hospitals equipped to scan chipped patients.
But in its SEC filings, product labels and press releases, VeriChip Corp. has not mentioned the existence of research linking embedded transponders to tumors in test animals.
When the FDA approved the device, it noted some Verichip risks: The capsules could migrate around the body, making them difficult to extract; they might interfere with defibrillators, or be incompatible with MRI scans, causing burns. While also warning that the chips could cause "adverse tissue reaction," FDA made no reference to malignant growths in animal studies.
Did the agency review literature on microchip implants and animal cancer?
Dr. Katherine Albrecht, a privacy advocate and RFID expert, asked shortly after VeriChip's approval what evidence the agency had reviewed. When FDA declined to provide information, she filed a Freedom of Information Act request. More than a year later, she received a letter stating there were no documents matching her request.
"The public relies on the FDA to evaluate all the data and make sure the devices it approves are safe," she says, "but if they're not doing that, who's covering our backs?"
Late last year, Albrecht unearthed at the Harvard medical library three studies noting cancerous tumors in some chipped mice and rats, plus a reference in another study to a chipped dog with a tumor. She forwarded them to the AP, which subsequently found three additional mice studies with similar findings, plus another report of a chipped dog with a tumor.
Asked if it had taken these studies into account, the FDA said VeriChip documents were being kept confidential to protect trade secrets. After AP filed a FOIA request, the FDA made available for a phone interview Anthony Watson, who was in charge of the VeriChip approval process.
"At the time we reviewed this, I don't remember seeing anything like that," he said of animal studies linking microchips to cancer. A literature search "didn't turn up anything that would be of concern."
In general, Watson said, companies are expected to provide safety-and-effectiveness data during the approval process, "even if it's adverse information."
Watson added: "The few articles from the literature that did discuss adverse tissue reactions similar to those in the articles you provided, describe the responses as foreign body reactions that are typical of other implantable devices. The balance of the data provided in the submission supported approval of the device."
Another implantable device could be a pacemaker, and indeed, tumors have in some cases attached to foreign bodies inside humans. But Dr. Neil Lipman, director of the Research Animal Resource Center at Memorial Sloan-Kettering, said it's not the same. The microchip isn't like a pacemaker that's vital to keeping someone alive, he added, "so at this stage, the payoff doesn't justify the risks."
Silverman, VeriChip Corp.'s chief executive, disagreed. "Each month pet microchips reunite over 8,000 dogs and cats with their owners," he said. "We believe the VeriMed Patient Identification System will provide similar positive benefits for at-risk patients who are unable to communicate for themselves in an emergency."
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And what of former HHS secretary Thompson?
When asked what role, if any, he played in VeriChip's approval, Thompson replied: "I had nothing to do with it. And if you look back at my record, you will find that there has never been any improprieties whatsoever."
FDA's Watson said: "I have no recollection of him being involved in it at all." VeriChip Corp. declined comment.
Thompson vigorously campaigned for electronic medical records and healthcare technology both as governor of Wisconsin and at HHS. While in President Bush's Cabinet, he formed a "medical innovation" task force that worked to partner FDA with companies developing medical information technologies.
At a "Medical Innovation Summit" on Oct. 20, 2004, Lester Crawford, the FDA's acting commissioner, thanked the secretary for getting the agency "deeply involved in the use of new information technology to help prevent medication error." One notable example he cited: "the implantable chips and scanners of the VeriChip system our agency approved last week."
After leaving the Cabinet and joining the company board, Thompson received options on 166,667 shares of VeriChip Corp. stock, and options on an additional 100,000 shares of stock from its parent company, Applied Digital Solutions, according to SEC records. He also received $40,000 in cash in 2005 and again in 2006, the filings show.
The Project on Government Oversight called Thompson's actions "unacceptable" even though they did not violate what the independent watchdog group calls weak conflict-of-interest laws.
"A decade ago, people would be embarrassed to cash in on their government connections. But now it's like the Wild West," said the group's executive director, Danielle Brian.
Thompson is a partner at Akin Gump Strauss Hauer & Feld LLP, a Washington law firm that was paid $1.2 million for legal services it provided the chip maker in 2005 and 2006, according to SEC filings.
He stepped down as a VeriChip Corp. director in March to seek the GOP presidential nomination, and records show that the company gave his campaign $7,400 before he bowed out of the race in August.
In a TV interview while still on the board, Thompson was explaining the benefits — and the ease — of being chipped when an interviewer interrupted:
"I'm sorry, sir. Did you just say you would get one implanted in your arm?"
"Absolutely," Thompson replied. "Without a doubt."
"No concerns at all?"
"No."
But to date, Thompson has yet to be chipped himself.
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On the Web:
http://www.verichipcorp.com
http://www.antichips.com
http://www.fda.gov/cdrh/
