Non-Environmental Cost-Benefit News

By Christopher Farrell

Starting with Richard Nixon, every U.S. President has declared war on drugs. The FBI, CIA, DEA, military, and countless prosecutors have devoted enormous resources to combating narcotics over the past several decades. According to an estimate by Boston University economist Jeffrey A. Miron, federal, state, and local governments have put some $33 billion in resources toward prosecuting the war on drugs in recent years.
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How is the return on that investment? Abysmal. The demand for such illegal drugs as marijuana, cocaine, and heroin remains strong. Drug lords and their cartels terrorize nations and local communities. Crime and corruption derived from the illegal drug trade flourish. U.S. prisons are crowded with drug-law offenders -- more than 54% of federal prisoners sentenced in 2004 were sent away for breaking drug laws.

REMEMBER PROHIBITION. Here's how Harvard University economist and BusinessWeek commentator Robert J. Barro summed up the record of the war on drugs in his paper Getting It Right: Markets and Choices in a Free Society: "The experience with drug enforcement shows that prohibitions of recreational drugs drive up prices, stimulate illegal activity, have only a moderate negative effect on consumption, and impose unacceptable costs in terms of high crime, expansion of prison populations, and deterioration of relations with the foreign countries that supply the outlawed products."

It's time to consider a dramatic shift in policy. Instead of the battle cry "war on drugs," let's try the mantra "legalization, regulation, and taxation." We should regulate narcotics just as we do cigarettes and alcohol, restricting sales to minors and imposing steep excise taxes.

Indeed, the model for dealing with alcohol is instructive. Banning alcohol outright in the U.S. was a public policy disaster. Ending Prohibition quickly cleaned up the liquor industry. Gangsters were denied a lucrative source of income, and violent crime associated with the business fell.

FEAR FOR KIDS. Similarly, legalizing drugs would eliminate much of the profit, corruption, and violence from the trade. The risk of death or impairment from contaminated drugs would decrease. And the shift in focus would free up scarce government resources at a time when the twin demands of an aging population and the war on terror are putting stress on the fiscal purse.

The notion of legalizing drugs isn't new. Milton Friedman, the dean of conservative economists, argued as long ago as 1972 that "legalizing drugs would simultaneously reduce the amount of crime and raise the quality of law enforcement." Yet the idea never garnered much support beyond a hard core of conservative economists, libertarian idealists, and the occasional hard-pressed mayor and discouraged drug warrior.

The reason: Fear that the post-legalization drop in drug prices would cause the ranks of addicted citizens to soar. For instance, it's estimated that cocaine sells for 10 to 40 times its free market price. So, even though many practitioners of the dismal science believed the benefits of legalization would far outweigh the cost, many middle-class voters looked at their kids and decided that the risks weren't worth taking.

PRICE MATTERS. Yet recent research suggests that legislators and voters should take a close look at legalization. A recent paper by Nobel laureate and University of Chicago economist Gary S. Becker, his faculty peer Kevin M. Murphy, and City University of New York economist Michael Grossman persuasively argues that fighting a war on drugs through legalizing and heavily taxing them could be more effective in curbing consumption than prohibition and prosecution.

Their highly theoretical paper, "The Economic Theory of Illegal Goods: The Case of Drugs," builds on years of empirical work into the economics of illegal drugs. A key insight of the literature is that price matters -- even with addictive substances. Just as lower prices for drugs encourage consumption, higher prices discourage it.

In another research paper, Grossman delved into the impact of price on the consumption of cigarettes, beer, and marijuana from 1975 to 2003. His results are intriguing. He found that the 70% increase in the real price of cigarettes since 1997 (thanks to the tobacco settlement with state attorneys general) explains almost the entire 12% reduction in the cigarette smoking participation rate since then. The 7% increase in the real price of beer from 1990 to 1992 accounts for almost 90% of the 4 percentage point reduction in binge drinking through 2003.

SHOCKING SUM. Similarly, the increase in the real price of marijuana from 1975 to 1992 accounts for 70% of the usage reduction during that time period. Falling prices contributed some 60% of the increase in substance abuse from 1992 to 1997, and another wild upswing in price powered 60% of the decline in toking during the remaining years under study.

To be sure, addictive drugs are hard to quit. Many people who manage to stop snorting or shooting up spend the rest of their lives fighting the urge to get high. Still, one can't ignore that price matters even in this market.

Grossman's results remind me of my bunk mate on the rust-bucket oil tanker we worked on in the late 1970s. He was a grizzled old-timer carrying the scars of years of union organizing. Those times were long gone, as was his habit of smoking several packs a day. One night, between sips of coffee, he told me that he once calculated how much he was spending a year on cigarettes. The sum -- a couple of thousand dollars even back then -- shocked him, and he quit.

NO PANACEAS. The Becker, Murphy, and Grossman analysis suggests that with the addition of a steep excise tax -- several hundred percentage points above the cost of wholesale production, for example -- the price of cocaine could be greater than the price the fruitless war on drugs supports. It's possible that consumption would be lower in a high-tax regime than it is in today's law-enforcement environment.

A high price would give some producers an incentive to go underground as well. But law enforcement could focus its efforts on a much smaller illegal economy. And the tax revenue could go toward funding treatment programs.

Let's be clear: There are no panaceas and no easy choices here. As a parent, I find the notion of making heroin or cocaine legally available at the corner liquor store frightening. Yet -- with the benefit of several decades' worth of hindsight -- legalization, taxation, and regulation appear superior to the current strategy of prohibition and prosecution. There's just too much human devastation, violent crime, corruption, disease, and wasted time and money embedded in the old approach.

I know that the cost of drug abuse and addiction -- including nicotine and alcohol -- is already substantial, especially measured by increased health-care expenditures and lower worker productivity. And I have no wish to see the numbers of addicts increase. But there's the hope that with a carefully crafted new paradigm of legalization, there could be fewer users. That's positive. There's nothing positive to be derived from staying with the status quo.

By Christopher Farrell, Farrell is contributing economics editor for BusinessWeek. You can also hear him on Minnesota Public Radio's nationally syndicated finance program, Sound Money, as well as on public radio's business program Marketplace. Follow his Sound Money column, only on BusinessWeek Online

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British business has spent £38.9 billion in dealing with red tape since the Labour Government came to power, according to figures released today by the British Chambers of Commerce (BCC). The cost of compliance has risen by nearly a third since 2004.

The independently compiled report, the BCC’s “Burdens Barometer”, assesses the cost of 46 major regulations introduced by the Labour Government since 1998. It does not include the cost to business of implementing the national minimum wage.

In all, says the BCC, the regulations have created annual costs to business of over £15 million per year.

Most expensive have been the Working Time Regulations, which implement an EU Directive that aims to protect workers from the health and safety consequences of overworking. The UK negotiated an opt out, allowing it not to apply a 48-hour limit to working hours in some circumstances, but its implementation will have cost UK business £13.6 billion by July this year.

The Data Protection Act and regulations amending Vehicle Excise Duty requirements have each cost British business over £5 billion in compliance according to the BCC.

"British businesses are fed up with the spiraling costs of regulation. Businesses must be free to compete in the global economy. They simply cannot afford to be held back by the mounting costs of complying with regulation,” said BCC Director General David Frost.

"While we recognize the need for proportionate regulation, the government must ensure that new regulations are well targeted and business friendly,” he added. “Unnecessary burdens are not a sustainable option for our firms."

According to the BCC, figures for the Barometer are taken from the government’s own Regulatory Impact Assessments. These evaluate the risks, costs and benefits of any new regulatory proposal that has an impact on business.

www.out-law.com
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Feb. 25--Confronted with conflicting cost and benefit numbers, a Senate budget committee ordered a special audit Thursday to determine whether privatizing prisons really saves Florida taxpayers any money.

Lobbyists for the Police Benevolent Association said the private companies have used their political influence to cut corners and dodge a legal mandate of operating 7 percent cheaper than state-run prisons. The PBA, which represents about 18,000 correctional officers in state institutions and probation officers, opposes privatization -- as other state employee unions do.

But lobbyists for Geo Group and Corrections Corporation of America, the two companies running the state's five privatized prisons, said their operating and program costs are generally below what it costs the Department of Corrections to run a prison. The privately run institutions have also had better service, they said, with fewer escapes and inmate disturbances.

"This is the poster child for everything that's bad in privatization of state government," said David Murrell, executive director of the PBA. "We think the taxpayers are being soaked for millions of dollars. We think the people of this state are being sold a bill of goods."

Murrell and Ken Kopczynski, the PBA's legislative aide, said Geo and CCA enjoy a cap of $8,100 per inmate in medical costs and can "dump" extremely costly hospitalization treatment on the DOC if a prisoner needs long-term care. They also said the companies were supposed to pay property taxes to counties, when privatization was begun in 1986, but that the Legislature has given them tax breaks and credits against their corporate income taxes.

Kopczynski said the state has assumed $4.1 million in medical costs for prisoners who passed the $8,100 cap in a private institution and that lawmakers reimbursed counties $1 million for lost property taxes.

He and Murrell said state prisons have to pay higher salaries because they have more senior staff. Kopczynski said the five private prisons average 43 percent turnover a year because of low salaries and poor benefits and that the Gadsden County institution for women had 76 percent turnover in 2003.

"The for-profit private prison industry says they can do it better and cheaper," said Kopczynski. "This is true when you ignore statutes, medical cost, taxes, debt service, high turnover, low pay and fewer benefits."

Damon Smith, a lobbyist for Geo Group, and Matt Bryan, representing CCA, disputed the PBA figures. They said it is hard to compare state and private costs because no two prisons are alike, but that the corporations are meeting their 7 percent savings goal.

Bryan said, for instance, that "program costs" -- mostly drug treatment and education -- cost about $30 per inmate per day in the DOC but only $10 per day in CCA prisons.

CCA operates prisons in Bay, Gadsden and Columbia counties. Geo has two, in Okeechobee and in Palm Beach County. The state is planning a 1,200-inmate private prison near Graceville.

"Not one union member has lost his job due to prison privatization," said Smith. "I'm not sure what their problem is. We haven't tried to take over one state facility."

Sen. Victor Crist, R-Temple Terrace, chairman of the Justice Appropriations Committee, said he would have the Office of Program Policy and Government Accountability audit the costs of private prisons. OPPAGA is the Legislature's accounting and performance- monitoring agency.

"What are the real costs and what are the real savings?" Crist asked. "Are we taking into consideration all the indirect costs with the private prisons?"

Bill Cotterell
Knight Ridder Tribune Business News
http://proquest.umi.com/pqdweb?did=798476731&sid=1&Fmt=3&clientId=13371&RQT=309&VName=PQD
Tallahassee Democrat, Fla. www.Tallahassee.com
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Objective: To test whether an intervention to improve primary care depression management significantly improves productivity at work and absenteeism over 2 years. Setting and Subjects: Twelve community primary care practices recruiting depressed primary care patients identified in a previsit screening. Research Design: Practices were stratified by depression treatment patterns before randomization to enhanced or usual care. After delivering brief training, enhanced care clinicians provided improved depression management over 24 months. The research team evaluated productivity and absenteeism at baseline, 6, 12, 18, and 24 months in 326 patients who reported full-or part-time work at one or more completed waves. Results: Employed patients in the enhanced care condition reported 6.1% greater productivity and 22.8% less absenteeism over 2 years. Consistent with its impact on depression severity and emotional role functioning, intervention effects were more observable in consistently employed subjects where the intervention improved productivity by 8.2% over 2 years at an estimated annual value of $1982 per depressed full-time equivalent and reduced absenteeism by 28.4% or 12.3 days over 2 years at an estimated annual value of $619 per depressed full-time equivalent. Conclusions: This trial, which is the first to our knowledge to demonstrate that improving the quality of care for any chronic disease has positive consequences for productivity and absenteeism, encourages formal cost-benefit research to assess the potential return-on-investment employers of stable workforces can realize from using their purchasing power to encourage better depression treatment for their employees.

Kathryn Rost, Jeffrey L Smith, and Miriam Dickinson
Medical Care via Proquest
Dec 2004.Vol.42, Iss. 12; pg. 1202
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Lamb producers will be able to predict profit margins from lotfeeding lambs on-farm thanks to a new lotfeeding cost-benefit calculator to be unveiled at next month's Forbes MLA 'Prime Time for Prime Lamb' forum.

The lotfeeding calculator, developed by NSW Department of Primary Industries District Livestock Officer Geoff Duddy, is an Excel spreadsheet that takes into account the starting costs, feed and management costs (health, shearing, transport, commission and labour) and, importantly, the ‘break even' selling prices for finished lambs.

Mr Duddy, who is based at the Yanco Agricultural Institute, will demonstrate the calculator at the Forbes MLA ‘Prime Time for Prime Lamb' forum at the Forbes Services Club, 41 Templar Street, on Wednesday 9 March. (The lotfeeding calculator will be officially launched by the Australian Sheep Industry CRC in late 2005.)

"Margins are fairly tight with respect to finishing lambs in feedlots due primarily to high store lamb prices relative to the prices for finished lambs," Mr Duddy said.

"Producers are however, able to value-add feed inputs such as low value, high screening cereal grain held on-farm through a lamb lotfeeding system.

"By using the lotfeeding calculator, producers can accurately estimate feedlot production costs, a break-even sale price and look to ‘lock in' and/or negotiate a profitable forward contract price for their finished product."

Mr Duddy will also advise producers at the Forbes MLA ‘Prime Time for Prime Lamb' forum of the suitability of various cereal and pulse grains and the importance of fibre for finishing lambs.

He believes producers need to consider that in addition to feeding their lambs grain, it is important to have at least 10 per cent of ‘effective' fibre to stimulate the rumen.

"I don't necessarily recommend high quality roughage, because it's dearer per unit of protein and energy compared to grain," Mr Duddy said.

"It makes more economic sense to use medium to low quality hay as the roughage to meet the 10 per cent effective fibre requirement and focus on providing your lambs with the protein and energy they need from the grain component."

Forbes Advocate Australia http://forbes.yourguide.com.au
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More than 200 years ago, economist Adam Smith tackled the subject of religion in his 1776 classic The Wealth of Nations.

Comparing religious institutions to secular businesses, he argued that both face market forces such as competition, monopoly and government regulation.

But for two centuries, economists have virtually ignored the role faith plays in the economy.

"Economists in general are very agnostic about what people value," said Laurence R. Iannaccone, an economist at George Mason University in Fairfax, Va., and the head of the Association for the Study of Religion, Economics and Culture. "Most people think it's all about earning money."

But just as politicians increasingly recognize religion's powerful role in public life, so too are economists. A recent batch of scholarship has examined everything from the impact of religion on educational achievement to its effect on a country's wealth.

"Even the Bible uses a lot of very commerce oriented language to talk about the value of being part of the kingdom of God," Iannaccone said.

Many scholars in this field apply a "rational choice" model to the study of religion, which considers religious behavior a choice people make between alternative ways to spend their time and resources.

For example, a person may choose to spend Sunday in a church or at the mall.

"They are taking the premise that we are economic beings," said Millsaps College religious studies professor Darby Ray. "And asking how is it that religion gets shaped by our decisions as consumers."

Iannaccone (pronounced YAWN-uh-cone-ee) said the biggest single insight that comes out of the economic study of religion is that religious behavior is much more rational and understandable than psychologists and sociologists have led people to believe.

As such, in a 1998 paper published in the Journal of Economic Literature, Iannaccone wrote that Americans have access to "an immense market of more than 1,500 denominational alternatives" and often shop for the house of worship that best meets their needs.

"Evangelical Christianity in the United States looks like a classic free market," he said. "If you look closely enough, they're constantly trying to find better ways to 'sell' their product."

# Total church contributions in the United States have remained around 1 percent of Gross National Product since 1955.

# Rates of religious belief and activity do not decline with a rise in income and educational achievement.

# Style of religion varies with income and education. Theologically conservative denominations (typically labeled "fundamentalist" or "Pentecostal") draw a disproportionate share of members from among poorer, less educated and minority groups.

# Throughout the world, fast growing religions tend to be strict and theologically conservative.

# Members of liberal Protestant denominations (including some Episcopal, Methodist and Presbyterian churches) contribute 1.5 percent of their income to their churches.

# Members of conservative Protestant denominations such as Southern Baptists and Assemblies of God contribute 2 to 4 percent of their income.

# Mormons contribute an average 6 percent of their income to their churches.

# Blacks attend church more than whites and their rates of giving are somewhat higher.

# For the past 150 years, approximately 1.2 per 1,000 people in the United States have been employed as clergy.

Source: "Introduction to the Economics of Religion," by Laurence R. Iannaccone (Journal of Economic Literature, 1998).

Burgeoning field

Iannaccone studied under University of Chicago economist Gary S. Becker, who won the 1992 Nobel Prize for applying economics to the study of social issues such as crime, racial discrimination and the family.

For years, his colleagues considered his intellectual interests too far out of the mainstream.

But by the 1990s, interest in the interdisciplinary study began to pick up. And by 2004 Iannaccone kicked off an organization dedicated to the economics of religion.

The association's fall 2004 conference drew 55 research papers on topics ranging from fertility and religion to the economic consequences of religious freedom.

And another academic think tank called the Religion, Political Economy and Society Project formed three years ago at Harvard University's Weatherhead Center for International Affairs.

Headed by Harvard professor Rachel McCleary, the group takes an interdisciplinary approach to religion.

"One obvious objection we get is you can't quantify religion," McCleary said.

But she and other scholars have found that analyzing data about religious behavior can lead to conclusions about the economy.

For example, in a recent study, McCleary and husband Robert J. Barro, a Harvard economist, teamed to investigate how religious beliefs and practices affected a country's economic growth rate.

They looked at data amassed from six international surveys of 59 countries. The polls tabulated information including attendance at religious services and beliefs in heaven and hell.

The couple then examined how the data correlated to the countries' economic growth rate.

Countries with higher rates of religious belief than participation showed higher levels of economic productivity.

In other words, holding religious beliefs was good for the economy, provided people didn't spend too much time at their local houses of worship.

"If you keep going, the benefits are diminishing and costs are rising," McCleary said.

That's because if people spend too much time in worship, they'll have less time for work, furthering their education or other productive activities.

Examples of countries with higher levels of religious belief than practice are Japan, Britain and Scandinavian countries — which performed better economically than other countries studied.

On the flip side, India and some Latin American countries showed high levels of religious practice and lower economic growth rates.

The United States is an anomaly because it's a rich country with high rates of religious belief and practice.

"For us what's special about religion is beliefs and their influence on character," Barro said. "Not how it provides a social network."

Another finding in Barro and McCleary's study showed that belief in the afterlife — particularly hell — correlated positively with economic growth.

Or, the fear of eternal damnation motivated people to work hard and act ethically.

"We thought about that in terms of the carrot and the stick," Barro said.

Barro said he's interested in how religious beliefs affect traits such as honesty, thrift and openness to strangers.

And Barro and McCleary's work picks up on that of 19th century sociologist Max Weber, who wrote that the Protestant work ethic explained why predominantly Protestant countries did better economically.

Weber hypothesized that the Protestant Reformation created new values of individualism and linked salvation to a life of discipline and good works. He claimed thrift and dedication to one's work — which created greater productivity — was higher in Protestant communities.

Though scholars increasingly look at religion in economic terms, Iannaccone said more work still needs to be done to study the effect religion has on the economy.

"We really haven't done enough work yet to know which religions are most conducive to economic growth or how much religion really matters at all," he said.

Ray at Millsaps College said the economic study of religion has merits — and limitations.

"Religion many times is rooted in profound experiences of forgiveness, gratitude, mercy, redemption," said Ray, who directs the college's Faith and Work Initiative. "Those kinds of experiences cannot be reduced to rational choices and cost-benefit analysis."

Iannaccone acknowledges the boundaries of his work.

"I'm absolutely not claiming that economics or psychology or sociology tell us everything there is to know about religion," he said. "The deepest truths are completely beyond the realm of normal scientific inquiry."

# Visit the Association for the Study of Religion, Economics and Culture at gunston.doit.gmu.edu/liannacc/ERel.

# Visit The Religion, Political Economy and Society Project at Harvard University's Weatherhead Center for International Affairs at www.wcfia.harvard.edu/religion.

By Jean Gordon, jmgordon@clarionledger.com
The Clarion Ledger www.clarionledger.com
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Cost-benefit analyses for drugs are rarely as explicit as they were yesterday.

When a federal panel of doctors and scientists recommended allowing the sale of arthritis medicines from Pfizer and Merck despite acknowledging their heart risks, it did more than just give new life for Celebrex, Bextra and possibly Vioxx - three drugs some analysts had viewed as doomed.

The panel's recommendations backed the pharmaceutical industry's stance that no medicine is risk-free and that patients should sometimes be allowed to choose medicines that have serious risks even for conditions that are not life-threatening.

The panel, which was convened by the Food and Drug Administration to discuss the risks of pain medications, reached its conclusions after three days of hearings in Maryland. The F.D.A. typically adopts the recommendations of its expert panels, particularly in such controversial matters.

Even as a vocal alliance of consumer groups and plaintiffs' lawyers are raising similar questions over other widely used drugs, the panel's analysis offers at least a small dose of good news for the industry. Indeed, drug stocks rallied broadly yesterday, while the industry's critics spoke out against the panel's decision.

Merck shares ended the day up 13 percent, or $3.76, at $32.61. Pfizer rose almost 7 percent, gaining $1.74, to $26.80. Shares in both companies remain sharply lower than they were before Merck withdrew Vioxx from the market in late September.

Now Merck, which makes Vioxx, and Pfizer, which makes Celebrex and Bextra, face their own choices.

Merck stopped selling Vioxx last fall after a clinical trial showed evidence of heart risks in patients who took the drug for more than 18 months. The company can now decide whether to reintroduce it.

A Merck official said in testimony to the panel on Thursday that the company might take that step, if the experts concluded that the risks were characteristic of the entire class of drugs, known as cox-2 inhibitors. Yesterday, after the F.D.A. panel reached just that conclusion, Merck declined to comment further on its plans.

If it does bring back Vioxx, Merck faces the challenge of persuading doctors and their patients to use a medicine that it has already said is unsafe. Pfizer faces a similar though somewhat less serious challenge with its drugs, which have remained on the market, although their sales have fallen sharply.

Merck and Pfizer will also undoubtedly use the panel's conclusions to defend themselves against lawsuits by people who say they had heart problems after taking the drugs. Merck, in particular, faces hundreds of such suits, some of them scheduled to go to trial this spring.

While some lawyers said yesterday that jurors might not be swayed by the F.D.A. panel's analysis, the gains in Merck and Pfizer shares indicated that investors had initially concluded that the F.D.A. recommendations could limit the legal liabilities of the companies.

"Merck can say a panel of experts said this drug was safe enough to be continued to market," said C. J. Sylvester, an analyst at Banc of America Securities who has a neutral rating on the company.

John LaMattina, Pfizer's president for global research and development, said the panel's hearing had given patients new information about the risks and benefits of all pain medications, including over-the-counter drugs like Advil.

A spokeswoman for Merck said the company appreciated the chance to offer data to the committee and looked forward to further discussions with the F.D.A.

Despite yesterday's decision, the drugs will probably never again reach the sales they had last year, analysts said, in part because the panel recommended that the drugs carry so-called black box warnings - the most stringent measure used to warn of potential dangers.

Since they were introduced in 1999, Vioxx and Celebrex have been among the most heavily promoted and most popular drugs, each taken by more than 20 million people. In 2004, Vioxx, Celebrex and Bextra had combined sales of more than $6 billion, almost 10 percent of the total sales of Pfizer and Merck.

The recommendation that the drugs could still be sold drew scorn from critics like Dr. Marcia Angell, the former editor of The New England Journal of Medicine. She said the panel seemed to have been overly influenced by arthritis patients who testified that the drugs were the only medicines that helped them.

Dr. Angell said that Vioxx, Celebrex and Bextra had never been shown to work any better than older pain and arthritis medicines, so their increased heart risk make them unacceptable.

"I don't think any of these drugs should be on the market," Dr. Angell said. "To accept a risk like that you ought to have a powerful benefit, and I just don't see it. Anecdotes won't do it. Testimonials won't do it."

For Pfizer, the decision removes the risk that the company could be forced to withdraw Celebrex and Bextra from the market, which could have very likely spurred a flood of lawsuits similar to those that followed Vioxx's withdrawal last fall.

The legal picture is more complex for Merck, lawyers said yesterday. The company has set aside $675 million to cover the costs of fighting the lawsuits, and analysts have estimated its potential liabilities at $5 billion to $30 billion.

But the panel's decision yesterday gave Merck new ammunition for its claim that the benefits of the drug outweigh its risks, and plaintiffs' lawyers expect Merck to try to make the most of that in court.

"I'm sure Merck will try to use this to say the F.D.A. has reaffirmed that Vioxx is safe and effective," said Andy D. Birchfield Jr., a Montgomery, Ala., lawyer who began filing Vioxx lawsuits in 2001.

Some defense lawyers said that the panel's conclusions would not necessarily benefit Merck, even if the company did sell Vioxx again. Judges and juries may prefer to focus on the company's actions before it withdrew the drug in September.

"What Merck knew or should have known about the dangers and what it communicated at the time the product was taken is what's critical in these cases," said Kevin Dunn, a lawyer from San Francisco with many drug industry clients but no involvement with Merck.

Mr. Dunn added that the critical question was not whether adequate warnings were communicated to patients in advertising but whether doctors prescribing Vioxx had been fully informed.

Theodore V. H. Mayer, a lawyer for Merck, said simply, "It's too soon to speculate about the legal impact."

Merck has argued that it did not have conclusive evidence linking Vioxx to heightened heart attack and stroke risks until shortly before it withdrew the drug. Plaintiffs have said that clinical studies completed many years earlier provided ample evidence of the risks.

By Alex Berenson and Barnaby Feder
The New York Times www.nytimes.com
http://www.nytimes.com/2005/02/19/business/19drug.html

Geddes and Cipriani comment that available randomised evidence does not provide reliable estimates of the costs and benefits of treatment with selective serotonin reuptake inhibitors (SSRIs) in patients with varying degrees of severity and laments the decline in non-commercial funding.1 Recent guidelines from the National Institute for National Excellence (NICE) also lack evidence.2 The NHS health technology assessment programme is funding a trial to tackle this very question. Led by the University of Southampton, in partnership with the University of Liverpool and Institute of Psychiatry, the THREAD (threshold for antidepressants) trial is comparing the effectiveness of SSRIs combined with supportive care with supportive care alone in primary care.

Since Paykel said that severity of depression around the threshold of DSM major depressive episode was the level at which antidepressant drugs were more effective than placebo,3 two recent studies have shown that SSRI antidepressants may be effective in patients with depressive symptoms of lesser severity.4 5 Confusion results from the inexact use of terminology: what is described in NICE guidance as "mild" depression is actually sub-syndromal depression by ICD-10 criteria. THREAD is using a continuous measure of symptom severity, the Hamilton depression rating scale, as its chief predictor variable, and recruiting patients with a score of ≥ 12, likely to lie in at least the "moderate" range.

One finding of the trial already apparent, however, is that patients' and doctors' preferences make randomisation a difficult proposition in this context. As previously observed in trials of counselling and drug treatment in this population, truly randomised evidence may be obtainable only in a group of participants who are unusual in other respects, and we need to learn more about the strengths and weaknesses of randomised and preference designs for investigating the value of treatments in such contexts.

Robert Peveler, professor of liaison psychiatry
University of Southampton, Royal South Hants Hospital, Southampton SO14 0YG rcp@soton.ac.uk
Tony Kendrick, professor of primary medical care
University of Southampton, Aldermoor Health Centre, Southampton SO16 5ST

References

1. Geddes JR, Cipriani A. Selective serotonin re-uptake inhibitors remain useful drugs which need careful monitoring. BMJ 2004;329: 809-10. (9 October.)[Free Full Text]
2. National Institute for Clinical Excellence. Depression:management of depression in primary and secondary care. Clinical guideline 23. London: NICE, 2004. www.nice.org.uk/pdf/CG023quickrefguide.pdf (accessed 11 Feb 2005).
3. Paykel ES, Hollyman JC, Freeling P, Sedgwick P. Predictors of therapeutic benefit from amitriptyline in mild depression: a general practice placebo-controlled trial. J Affective Dis 1988;14: 83-95[CrossRef][ISI][Medline]
4. Judd LL, Rapaport MH, Yonkers KA, Rush AJ, Frank E, Thase ME, et al. Randomized placebo-controlled trial of fluoxetine for acute treatment of minor depressive disorder. Am J Psychiatry 2004;161: 1864-71.[Abstract/Free Full Text]
5. Barrett JE, Williams JW, Oxman TE, Frank E, Katon W, Sullivan M, et al. Treatment of dysthymia and minor depression in primary care: a randomized trial in patients aged 18 to 59 years. J Fam Pract 2001;50: 405-12.[ISI][Medline]

BMJ 2005;330:420-421 (19 February), doi:10.1136/bmj.330.7488.420-b
http://bmj.bmjjournals.com
http://bmj.bmjjournals.com/cgi/content/full/330/7488/420-b

Freshman Max Bender uses the phone plugged into the wall of his American University dorm room so rarely that he forgot it was there. "Hey," he said the other day when he walked in and saw it on top of the microwave. "We do have a land line."

Starting next fall, AU students conditioned to cell phones will find few of those wired artifacts as the school all but eliminates traditional phone service in its residence halls.

Across the country, wired phones are becoming obsolete. Although not many colleges have eliminated them, "almost every major school is evaluating it," said Jeri Semer, executive director of the Association for Communications Technology Professionals in Higher Education.

This transformation of campus culture -- cell phones keeping students closely tied to friends and family, making social life fluid, even intruding on professors' lectures -- also poses a financial challenge for administrators. Land-line phones used to bring in money for many schools. Now some find themselves paying to maintain systems that students rarely use.

"Six or seven years ago, telephones on campus were a cash cow," said Glenn Gaslin of Morrisville State College in New York, which got rid of its land lines in 2003 and provided students with mobile phones, with an option to add long-distance service. Marshall University in West Virginia will complete a switch to cell phones in student housing in the fall, giving out phones that include long-distance calling plans.

It wasn't that long ago, a generation perhaps, when students had to wait in line to use communal phones in dormitory hallways. Five years ago, just over one-third of U.S. college students had cell phones on campus, according to a national survey by the market-research firm Student Monitor. In the fall, nearly nine of 10 did.

At James Madison University in Harrisonburg, the student directory is no longer full of four-digit dorm-room extensions, but rather 10-digit cell phone numbers from Tennessee, New Jersey, Delaware and other states. James Madison administrators don't want to tell students that they have to bring cell phones, though, said spokesman Andrew Perrine.

"It's like requiring kids to show up with golf clubs or something," he said.

Leaders of some U.S. universities -- including George Washington, the University of Maryland and the University of Virginia -- are evaluating their phone options. Some administrators aren't sure that they could ensure student safety without at least a few land lines in dorms. And some students worry that 911 calls from cell phones might not be routed properly and that "dead zones" might leave them without service.

At GWU, which plans to have fewer wired phones in student rooms, officials also are concerned about the potentially higher costs for international students calling overseas on cells.

American University already feels unplugged. The campus is wireless, so students can type e-mails and study on laptops from couches, the steps of the library and benches outside. Snatches of one-sided conversations drift by as students walk to class talking on their cells. Next fall, the university will provide business school students the latest BlackBerry devices.

Bender and his friend Lauren Fox, who lives on the same dorm hall, have each had a cell phone for years, although Bender keeps getting new ones after losing or breaking them.

One day last week, Fox, in her room with a frosting-pink lamp and flowered bedspread, had her cell close at hand, next to her laptop, just as her roommate did. She said she talks to her parents in Texas twice a day, usually, and to her twin sister in Indiana at least four times a day -- the two use 2,000 minutes a month.

"It used to be you'd call someone because you had a reason to call," said Ian Johnson, 28, a graduate student at American. "Now you call because you're bored waiting for the bus to come. . . . It's almost a noise pollution."

In the past three years at AU, long-distance calls from the dorm phones plummeted.

Five years ago, the school made hundreds of thousands of dollars a year on long-distance service, said Carl Whitman, executive director of the Office of Information Technology. Last semester, the school made $1,109.

The money that colleges charged students helped pay for their decades-old phone systems; now they can't even get some parts when things break, said Julie E. Weber, AU's executive director of housing and dining programs.

So come fall, American will have some land-line phones in hallways for local calls, one for every 40 to 50 students, but administrators don't expect them to get much use.

Replacing the phone system in the residence halls would cost more than $1 million, Whitman said, estimating that $100,000 a year would be saved on operating costs.

And what about the students who can't afford cell phones? "Not everyone is fortunate enough," Bender said.

He and Fox looked at each other, trying to think of someone at AU -- but everyone they know has one.

Susan Kinzie, page A1
The Washington Post www.washingtonpost.com
http://www.washingtonpost.com/wp-dyn/articles/A17491-2005Feb11.html?nav=rss_metro

Samples of urban community couples in Shanghai, China, and suburban U.S. couples were administered measures of relationship adjustment and personal standards regarding characteristics of couple relationships. There were few gender differences in adherence to relationship standards but many differences between Chinese and U.S. couples. Fewer cultural differences existed in degree of couple consensus on relationship standards, but both adherence to standards and couple consensus on standards were associated with partners' levels of marital adjustment. Implications of the findings for clinical assessment and intervention with distressed couples, in particular for Western therapists working with Chinese couples whose standards may conflict with goals and methods of couple therapy, are discussed.

There has been growing evidence that the ways in which members of couples perceive, interpret, and evaluate each other and the events that occur in their relationship have a significant impact on the quality of their relationships (Epstein & Baucom, 2002). Baucom, Epstein, Sayers, and Sher (1989) identified five major types of cognition that have potential to influence partners' emotional and behavioral responses to each other: (a) Selective perceptions, or the particular aspects of relationship events that each partner notices; (b) attributions, the inferences that each person makes about causes of positive and negative aspects of the relationship; (c) expectancies or predictions about the likelihood that particular events will occur in the relationship; (d) assumptions that involve basic beliefs or schemas about the characteristics that individuals and relationships have in general, or about characteristics of one's own relationship; and (e) standards involving beliefs or schemas about the characteristics that relationships and their members "should" have.

Whereas selective perceptions, attributions, and expectancies are forms of moment-to-moment information processing, assumptions and standards tend to be more long-standing schemas or "cognitive structures"-relatively stable concepts that an individual develops about the world, including the characteristics of intimate relationships. The temporal distinction between schemas and the more moment-to-moment forms of cognition becomes less clear when members of a couple develop relatively stable attributions about the causes of events in their relationship (e.g., "She forgets things I tell her because I'm not important to her."). Such a cross-situational attributional style (Noller, Beach, & Osgarby, 1997) can be considered a form of schema in that it is a stable assumption about relatively consistent aspects of the partner that shape the partner's behavior.

Research studies have provided evidence that all five forms of cognition identified by Baucom et al. (1989) affect partners' level of satisfaction with their relationships and the degrees to which they communicate with each other in positive or negative ways (Baucom & Epstein, 1990; Epstein & Baucom, 1993, 2002; Fincham & Beach, 1999; Noller et al., 1997). The two types of cognitions that have received the most empirical attention and support as factors in couples' relationship quality have been attributions and standards. This study was intended to expand knowledge of the role of standards in couple relationships, exploring cross-cultural differences, because most research has been conducted with U.S. samples. Cultural differences in partners' relationship standards must be taken into account to achieve culturally sensitive assessment and treatment of relationship problems.

The results of this study expand on prior research indicating that couples' relationship standards play an important role in marital adjustment and should be one of the realms that couple therapists assess and be prepared to intervene with when working with distressed couples. Whereas prior research demonstrating the importance of relationship standards focused on couples in the U.S. and other Western countries, this study indicated that standards are also important in marital adjustment in China, evidence of their broad impact across diverse cultures. The findings also revealed a number of cultural differences between Chinese and U.S. couples in relationship standards and their association with marital distress, an area that had not been examined in previous studies of couples' cognitions. Although previous research has identified cultural differences in areas of marital conflict between Asian and Western marriages, research on cognitive factors involved in marital conflict and distress has been lacking. This study indicated that Chinese and U.S. couples differed significantly on seven of the 11 IGRS subscales, with U.S. spouses wanting more boundaries around their relationship (less sharing of information about the relationship with outsiders, accepting less advice from others) than do Chinese spouses, and Chinese couples holding stronger standards supporting the exercise of power/control in their relationships (giving in to one's partner, trying to change the partner, and resisting control by the partner). Thus, what U.S. couples tend to consider excessive intrusion into their relationships by extended family, friends, and other outsiders Chinese couples find more acceptable, and what U.S. couples are likely to view as undesirable "power struggles" are considered more acceptable by their Chinese counterparts. Finally, Chinese couples reported stronger standards for sharing values (an emphasis on unity and avoidance of conflict), as well as standards for more instrumental investment in one's relationship and greater efforts to make the relationship perfect.

Although the finding that Chinese couples held standards for fewer boundaries around their relationships than did U.S. couples was contrary to the hypothesis, it was consistent with research indicating that Chinese individuals' concerns about privacy of personal issues pertain to those viewed as relative strangers, and when other people are defined as trustworthy close friends, Chinese individuals are more likely than Westerners to disclose personal information to them. The standards that Chinese couples set for allowing others into their relationships pose a potential barrier for couple therapists, in that a therapist is likely to be viewed as an outsider whose trustworthiness has not been demonstrated, in contrast to close extended family members and friends with whom there is considerable self-disclosure and help-seeking. As Gudykunst and Ting-Toomey (1988) have found greater differentiation between close friends and casual friends among the Chinese than among Americans, therapists attempting to form a therapeutic alliance with Chinese couples must be sensitive to the possibility that it may be a gradual process and he or she should convey respect for the couple's boundary; for example, by deferring questions about intimate areas of the clients' lives. On the positive side, our results suggest that if a therapist is successful over time in conveying a sense of trustworthiness and concern to a Chinese couple, the couple may become more open to therapeutic input than many U.S. couples.

The finding here that Chinese couples' standards support greater exercise of power/control in their relationships than U.S. couples' standards was consistent with the hypothesis and prior information about couple relationships in Chinese and U.S. societies. Chinese society has a longer and more consistent history of being hierarchical, with females valued less than males from birth. Even though Chinese women's status is improving and many couples now report egalitarian decision making, gender roles are in flux in China, and it is not surprising that many individuals see a need for exercising power as partners struggle to define their degrees of influence with each other. Western family therapists whose own relationship standards and approaches to couple therapy are likely to emphasize egalitarian relationships must be cautious not to impose their own values when working with Chinese couples, especially not interpreting acceptance of power strategies as evidence that Chinese partners place their own needs over the welfare of the relationship. Indeed, our finding that the Chinese couples did not differ from U.S. couples in standards for egalitarian outcomes in decision making suggests that Chinese couples may differentiate more than U.S. couples do between the process of trying to influence each other versus the outcome of having a relationship that is equitable overall. The Chinese couples also held stronger standards than the U.S. couples for sharing values, instrumental investment in one's relationship, and efforts to make their relationships perfect, consistent with prior research indicating a Chinese cultural emphasis on collectivist values, including harmony and devotion to the family. Thus the control strategies that Chinese partners believe it is acceptable to use with each other may not be viewed as incompatible with investment in the relationship and overall marital harmony. Overt expression of control strategies also need not be inconsistent with Chinese beliefs that one should not express negative feelings overtly. Nevertheless, the findings that Chinese females' marital adjustment was associated with their male partners holding lower standards for resisting control by one's partner and that Chinese males' marital adjustment was associated with their own and their female partners having lower standards for resisting control by one's partner suggest that Chinese spouses may be ambivalent about the traditional exercise of power in Chinese marriages. Consequently, the problem- solving skills commonly taught to couples in cognitive-behavior couple therapy (Epstein & Baucom, 2002) may be appealing to Chinese couples because the procedures of jointly defining a problem, brainstorming possible solutions without dismissing each person's ideas, collaborating on evaluating the costs and benefits of each proposed solution, and selecting a solution to be attempted on a trial basis allow partners opportunities to influence each other's positions while working as a team. This approach to problem solving is consistent with the standards for instrumental investment in one's relationship and efforts to make one's relationship as good as possible that were expressed by Chinese couples in this study.

The multiple regression analyses predicting individuals' marital adjustment from their own and th\eir partner's adherence to relationship standards indicated that both parties' standards are associated with a person's relationship adjustment, with considerable amounts of variance in marital adjustment scores accounted for by relationship standards. In most cases adjustment was predicted by a combination of standards, each accounting for unique variance in adjustment. For example, 40.7% of the variance in Chinese males' DAS scores was predicted by a combination of their own standards for more sharing of time together, more sharing of values, and less resisting control by one's partner. This combination seems consistent with prior research, such as Gottman's (1994) findings that marital adjustment is associated with a high rate of positive experiences between partners and a low rate of "stonewalling" or defensiveness and withdrawal. The tendency for adjustment to be predicted more strongly by the person's own standards is consistent with the idea that a person becomes more distressed as he or she perceives that the realities of the relationship fail to meet personal standards (Baucom & Epstein, 1990; Eidelson & Epstein, 1982). The impact of one person's standards on the other's relationship adjustment is likely to be indirect, mediated by the ways that the first person's standards influence his or her behavior toward the second person. However, it also is possible that the stronger association found in this study between one's own standards and marital adjustment is due to common method variance (i.e., both are measured by questionnaires administered to the same person).

An intriguing aspect of the results of the multiple regression analyses is that there was a tendency for the relation between marital adjustment and one's own standards, as well as for degree of partner consensus on standards, to be stronger for Chinese males and U.S. females than for Chinese females and U.S. males. The finding for U.S. females seems consistent with prior evidence that, in U.S. couples, wives play a key role in maintaining the emotional climate of the relationship and are concerned about and monitor the degree to which the members of the couple are attending to their relationship. Among Chinese couples, wives traditionally have left their families of origin to become part of their husband's family, and their personal values (and standards) may be more subjugated to those of the husband. Because this pattern is only suggestive and should be explored further in future research, it underscores how cultural comparisons must be made along a variety of dimensions, in this case with culture defined in terms of both country and gender. Therapists working with couples must strive to understand the different subjective experiences that females and males have in growing up in each culture, so their interventions will have good potential to increase each individual's satisfaction within his or her intimate relationship.

Another dyadic aspect of relationship standards that was investigated in this study was degree of couple consensus on each type of standard, cultural differences in consensus, and the degree of association between consensus and marital adjustment in each culture. Overall, there were fewer cultural differences on couple consensus (3 of 11 IGRS subscales) than there were on degree of individuals' adherence to relationship standards (7 of 11 subscales). Chinese couples' lower consensus than U.S. couples on degree of boundaries around their relationship might reflect rapid changes in family structure within China, with increasing numbers of couples developing autonomy from their families of origin. The Chinese couples' lower consensus on sharing time together may be due to increasing demands that partners' jobs and opportunities for further education (including abroad) place on the time that they can spend together, as China and its economy grow rapidly. For many Chinese couples there is a conflict between traditional collectivist valuing of family relationships and pressures to pursue education and jobs that take one away from the family. Evidence of the strength of this potential conflict can be found in the greater consensus we found among Chinese couples than among U.S. couples on standards for seeking perfection in the relationship, a reflection of the high value still placed on quality of the couple and family relationships in Chinese society. Couple therapists who work with Chinese couples need to be sensitive to the powerful forces, shaped by societal values that are internalized within individuals in the form of their relationship standards, that can contribute to both internal conflict within individual partners and to conflict between partners.

The multiple regression analyses indicated that couple consensus on relationship standards predicted marital adjustment for all four groups (Chinese and U.S. females and males), although they accounted for less variance in adjustment than individuals' adherence to standards did. As with adherence to standards, the types of standards for which couple consensus was associated with adjustment most often concerned two aspects of cohesiveness (sharing of time, sharing of values) and one concerning power/control (resisting control from one's partner). These findings suggest that couple therapists should routinely assess both individual adherence and couple consensus on these core dimensions of relationship functioning (Epstein & Baucom, 2002), being prepared to intervene when these standards appear to be contributing to conflict and distress.

Although it was not a major focus of this study, we found that members of this sample of U.S. community couples had higher total DAS scores than the Chinese community couples. Caution must be used in interpreting the group difference as any indication of lower marital adjustment in China, because there is reason to be concerned that the DAS is a culturally biased measure of relationship adjustment, due to its development on the basis of Western research on couple relationships and Western beliefs about relationship quality. A post-hoc analysis of cultural differences on the set of DAS items2 revealed that U.S. couples reported more frequent agreements concerning a variety of areas in their relationship (e.g., recreation, friends, philosophy of life, aims and goals), higher cohesiveness (e.g., engaging in outside interests together, exchanging ideas), and more open expression of both affection and conflict, among other differences. Rather than reflecting less relationship satisfaction or adjustment in Chinese than in U.S. couples, the differences in the two groups' responses to the DAS items may be due to differences in characteristics that are considered normative and acceptable in each culture, as revealed by prior research and by our findings concerning differences in relationship standards. For example, given the Chinese tradition of inhibiting open expressions of affection, it is likely that many partners who love each other still would not endorse items such as kissing one's partner frequently, thereby lowering their DAS score. In addition, the lower consensus on various relationship areas that members of Chinese couples reported on the DAS items is consistent with our finding of lower consensus among Chinese than U.S. couples on relationship standards. Their lower consensus can be considered in light of prior findings that Chinese couples commonly avoid open communication, both positive and negative, following the Chinese emphases on implicit communication and the avoidance of open conflict in interpersonal relationships (Gao et al., 1996; Huang, 1981 ; Wu, 1996). This avoidance pattern might seem to be inconsistent with the findings described earlier regarding Chinese couples' stronger adherence to standards for exerting power in their couple relationships, but control strategies need not involve open exchanges of ideas and feelings. Chinese couples who consider themselves to be happy within their relationships still may receive relatively low DAS scores by reporting low consensus on various aspects of the relationships. The low consensus on aspects of their relationships may not elicit concern or distress on their parts, whereas open discussions and conflict would. Consequently, a relatively low level of discussion of topics such as recreation choices, religion, friends, philosophy of life, goals, and the others that are assessed by DAS consensus subscale items, and the lower level of consensus on relationship standards found in the present study, may result in Chinese couples having many unresolved issues but not in distress.

Nevertheless, the avoidance of direct conflict by means of indirect communication that Chinese society encourages may be a risk factor for the development of relationship distress. Thus, the present finding of lower DAS scores among the Chinese couples may not reflect more distress than among the U.S. couples, but the combination of lower consensus and more avoidant communication among Chinese couples may pose a risk for the development of relationship problems. As Chinese couples increasingly approach marriage as a personal choice rather than a formal arrangement between families based on practical concerns, it is possible that partners' awareness of areas of conflict will increase the probability of relationship distress and divorce. In the face of evidence of an increasing divorce rate in China (Bullough & Ruan, 1994), there may be a need for new preventive and therapeutic programs focused on improving couples' communication and negotiation skills. Western therapists working with distressed Chinese immigrant couples also should assess areas in which partners lack consensus and examine communication patterns that may impede resolution of important differences. Work with these couples will require cultural sensitivity to traditional values concerning implicit communica\tion and maintenance of outward harmony. Communication skills training that commonly is embraced by U.S. couples may initially be quite uncomfortable for Chinese couples, so therapists may need to introduce them in small doses, simultaneously conveying understanding of the importance of harmony within the family. Given the potential for the development of reciprocal coercive control in Chinese couples' relationships if they make continuing efforts to exert control but fail to use good communication and problem-solving skills to resolve conflicts, the gradual introduction of such skills in couple therapy appears to be important.

The performance of the IGRS as a measure of relationship standards in both Chinese and U.S. couples suggested that despite modest internal consistency of some subscales, the set of subscales demonstrated considerable utility in tapping cognitions related to relationship adjustment. Although it will be important to conduct further studies with additional samples in a number of countries in order to determine the overall reliability, validity, and clinical utility of the IGRS for use in the assessment of couples, these results have been encouraging. At present, clinicians should use the instrument cautiously, perhaps using partners' responses to IGRS items as stimuli for more in-depth discussion with a couple of their relationship standards along the dimensions assessed by the subscales.

In summary, the results of this study further support the relevance of cognitive factors in couple relationships, and they underscore the importance of taking culture into account in assessing and intervening with individuals' standards or schemas about their intimate relationships. Given that cognitive-behavioral approaches to couple and family therapy that explicitly address relationship standards have for the most part been developed in Western countries, this research raises a concern that cognitive- behavioral concepts and methods such as communication skills training and cognitive restructuring methods that challenge partners' standards likely require tailoring to meet the needs of members of different cultures.

Source: Journal of Marital and Family Therapy
Red Nova www.rednova.com
http://www.rednova.com/news/display/?id=126969

A new cost-effectiveness analysis has led researchers from Duke University Medical Center and the Veterans Affairs (VA) Palo Alto Health Care System to recommend that routine voluntary screening for HIV, the virus that causes acquired immune deficiency syndrome (AIDS), should be expanded well beyond current guidelines to include health care settings where the incidence of the virus would be expected to be low.

These include such settings as outpatient clinics, urgent care clinics or emergency rooms in areas that have in the past been deemed low-risk for HIV. The researchers recommended expanded testing because of the success over the past decade of highly active antiretroviral therapy (HAART) in prolonging the quantity and quality of lives of patients infected with AIDS, as well as decreasing the rate at which those infected with the virus can transmit the disease to others.

HAART therapy involves using multiple drugs, all of which block replication of HIV genes. For most patients, these drugs combinations have reduced the viral load in the blood to virtually undetectable levels. Not only has this therapy increased the life expectancies of infected patients, but researchers believe that HAART also reduces their infectivity.

The results of the cost-effectiveness analysis were published Feb. 10, 2005, in the New England Journal of Medicine.

"While the Centers for Disease Control and Prevention's guidelines are that routine screenings are effective in settings where there is a one percent or above prevalence of disease, our analysis showed that such screening at much lower prevalence levels would provide important benefits. In addition we found this screening would be cost-effective and in-line with other commonly accepted screening programs," said lead author Gillian Sanders, Ph.D., a medical decision analyst at the Duke Clinical Research Institute.

"Past cost-effectiveness studies of HIV screening were conducted before the advent of HAART, a treatment regiment that has made AIDS a chronic disorder with much longer life expectancies," Sanders said. "Our study's results should provide the medical community, health care administrators and policy-makers with the data they need to expand screening."

Sanders' paper is being published alongside a study from researchers at Yale and Harvard with similar results. "These two independent studies provide great external validation for each other – emphasizing the robustness of our findings and the value of expanded HIV screening," she said.

Sanders led the study with colleagues from the Palo Alto (Calif) VA Health Care System, Stanford University, and St. Michael's Hospital, Toronto. The study was funded by the Department of Veterans Affairs Research and Development Service, the Ontario HIV Treatment Network and the National Institute of Drug Abuse.

For their analysis, the team used a model that accounts for a wide variety of variables, including patient characteristics, the natural history of the disease, the timing of testing and treatments, immunological status, outcomes, medical costs, and quality of life parameters. The data used for the model were drawn from the latest clinical trial results and studies published in the scientific literature.

The model targeted patients who were unaware of their HIV status when they entered the health care system, whether at a hospital, clinic, routine medical or emergency room visit. The model then calculated the incremental costs and benefits across the lifetime of typical patients. As a part of their analysis, the researchers assessed the cost-effectiveness with and without considering the benefits to the sexual partners of the patients.

In the U.S., the commonly accepted threshold for the cost-effectiveness of medical therapies is $50,000 per quality-adjusted life-year gained. A cost-effectiveness ratio below $50,000 is usually considered cost-effective and the treatment would be considered good value for the money. In these analyses, researchers not only include the potential medication, hospitalization and other medical costs, but also take into account quality-of-life benefits patients receive for their added life expectancies.

When the researchers considered a screening program in which the prevalence of unidentified HIV infection was one percent, the model found an increase in life expectancy of about 1.5 years for patients infected with HIV, costing $41,736 per quality-adjusted life-year gained compared to current practice. When the costs and benefits to the partner were included in the model, the cost-effectiveness of screening became even more favorable with an incremental cost effectiveness of $15,078 per quality-adjusted life-year.

"Additionally, the model showed that the prevalence of HIV can be as low as 0.5 percent and still remain below the $50,000 per quality-adjusted life-year threshold," Sanders continued. "When you then include the costs and benefits to partners, the prevalence can go as low as 0.05 percent before reaching the $50,000 threshold.

"These findings suggest that routine screening is likely to be cost-effective at a substantially lower prevalence than previously recognized," Sanders said. "We believe that in many different health care settings, routine HIV screening can provide important health benefits for a reasonable investment in health care resources."

Expanding the scope of routine HIV screening is important, the researchers said, because patients can be infected, as well as infectious, for many years before they start showing symptoms of the disease.

"Recent data from the CDC has shown that for 41 percent of HIV-infected patients in the U.S., symptoms of AIDS develop within a year of diagnosis, suggesting that opportunities to reduce risk behaviors or initiate early treatment had been missed," Sanders said.

Sander also cited a recent study of blood samples from outpatient clinics from six different Veterans Affairs Medical Centers (VAMC) systems that found a range of 0.13 to 2.9 percent of patients with undiagnosed HIV. Many outpatient settings do not routinely offer HIV screenings, though the current analysis would suggest that it would both increase life expectancy and be cost-effective, Sanders said.

Joining Sanders in the analysis, from the Palo Alto VA Health Care System, were Vandana Sundaram M.P.H, Lena Douglass, Mark Holodniy, M.D., and Douglas Owens, M.D. Other team members included Ahmed Bayoumi, M.D., from University of Toronto and S. Pinar Bilir, Christopher Neukermans, Chara Rydzak, and Laura Lazzeroni, Ph.D. from Stanford.

Contact: Richard Merritt
Merri006@mc.duke.edu
919-684-4148
Duke University Medical Center
www.eurekalert.org
http://www.eurekalert.org/pub_releases/2005-02/dumc-rhs020705.php

by Alan Sager, Ph.D. and Deborah Socolar, M.P.H.

I. HEALTH CARE COSTS ARE STILL SOARING UNSUSTAINABLY

• The expected $621 billion rise in U.S. health care spending from 2000 to 2005, we find, will consume nearly one-quarter of the nation’s projected economic growth (rise in GDP) of $2,579 billion ($2.6 trillion).
• This rests on a reliable federal projection that 2005 health spending will reach $1,921 billion ($1.9 trillion). That is 15.5 percent of the economy, up sharply from 2000’s 13.2 percent share.
• Had health spending in those five years grown only as fast as GDP, the U.S. would have saved $280 billion in 2005 (one-seventh of expected health cost), and $1 trillion in five years. Health spending growth averaged 8.1 percent yearly—more than two-thirds (69 percent) over GDP’s 4.8 percent.
• If defense spending reaches $540 billion in 2005, health spending will still be 3.6 times that. Health spending is now twice education spending.
• In January 2005, federal researchers published detailed data on 2003 health spending. That report, the press releases, and some news accounts focused on small differences, single-year changes, and other details. They missed the big-picture cost and coverage problems that concern most Americans.
• Administration officials called the findings “good news,” an unduly positive view that stressed 2003’s slightly slower rise in costs. Many press reports drew incomplete or incorrect conclusions. The data’s main implication is that costs continue rising unaffordably. U.S. health costs suffered the third-largest percentage rise in a decade and the second-largest dollar rise ever.
• The accuracy of federal predictions of health spending permit and oblige the U.S. to now address current costs, not 2003’s much lower costs.
• Rising health costs force many people to drop insurance and make it harder to cover all Americans. The unsustainable rise in health costs also threatens the stability of hospitals, doctors, nursing homes, drug makers and other caregivers. It burdens all who pay for care, and weakens the U.S. economy.
• Still, many caregivers and access advocates have endorsed spending more
to advance their distinct aims—partly because traditional cost controls have offered little to either group. It is essential, instead, to contain cost in ways that squeeze out waste, and mobilize the savings to finance high-quality care for all Americans—while paying all needed caregivers adequately.

II. BUT NEW STRATEGIES COULD CONTAIN COST, FINANCE NEEDED CARE FOR ALL PEOPLE, AND STABILIZE CAREGIVERS
• Traditional competitive and regulatory cost controls have failed in health care. The administration urges a new strategy, cost shifting, which it touts as “empowering consumers.” By promoting underinsurance, this strategy pushes patients to deny themselves care. There is no evidence that this is clinically safe or durably contains costs. Patients are the wrong target for cost controls.
• The alternative is to engage physicians in marshaling inevitably finite dollars to care for all Americans. Doctors are key to cutting cost because their decisions control 87 percent of personal health spending.
• One-half of health spending goes to clinical and administrative waste, excess prices, and theft. Physicians can identify clinical waste. Careful cost controls should rest on physicians’ decisions about services needed by each patient. Pathology is remorseless but resources are finite, so trade-offs are essential. There are no blank checks. Trustworthy methods of paying doctors should minimize incentives to over- or under-serve. Variations on this approach have been called “bedside rationing” or “professionalism within a budget.”
• It will be hard to engage doctors in this job, but their support is vital to gain backing for effective ways to contain cost and cover all Americans.
• The new Medicare law mandates a “national public debate” on how to make
care affordable. But it focuses on the wrong questions, and on one crude
cost-cutting tool—asking patients to gamble by excluding certain services
from coverage. This process should explore other ways to cut waste and
cost, and ways to foster careful physician decisions about appropriate care.
• In 2002, U.S. health spending per person was 2.1 times the average in
Canada, France, Germany, Italy, Japan, and the U.K.—nations with greater
elderly shares that cover all their people well. Current U.S. spending should be adequate to cover all Americans.
• U.S. health care lives on the hope that more money for business as usual will continue to flow. U.S. caregivers and payers are therefore spectacularly unprepared to economize if a serious recession were to hit. The economy’s fragility makes it vital to forge a contingency plan to live with no growth in real health spending. Caregivers must work with patients and payers to develop such a plan—one that avoids serious damage to both coverage and quality.
• Winning affordable high-quality care for all requires negotiating political deals. An acceptably-functioning free market is impossible in health care, so public action is essential to contain cost and expand coverage. Political deals must offer value to patients, caregivers, and payers. Agreement will be easier to negotiate if each party accepts the principle of “one hand for yourself and one for the ship” to balance private and public interests.

Two aspects of health spending—one that receives little attention, another that receives much—are worth highlighting, and offer great opportunities for savings. Administration and profit. The fastest-rising category of spending in 2003 was “program administration and net cost of private insurance.” This includes insurance industry profits along with the cost of administering public and private coverage. These costs increased to $119.7 billion in 2003, a rise of 13.2 percent from 2002, while spending on personal health care rose by 7.3 percent. Expenditures for insurance administration and profit thus rose 80 percent faster
in 2003 than spending on actual care. Further, over the decade from 1993 to 2003, while personal health spending rose by 86 percent, program administration and the net cost of private insurance rose by 125 percent. This spending has now surpassed annual spending on nursing home care.
Containing these costs—and also the even bigger administrative costs in
physicians’ offices and hospitals—will help make health care for all Americans affordable. Simple reforms would cut the paperwork and bureaucracy that divert resources from care—for example, by replacing thousands of different insurance companies and hundreds of thousands of insurance plans with a single payer. But it will be very difficult politically to enact and implement such reforms until patients, doctors, and other parties are provided with much greater certainty about how health care would actually work after the reform is implemented. In
particular, all parties need better information on how costs would actually be controlled, how caregivers would be paid, how coverage for all would be assured, what services would be provided, and how those decisions would be made. (The second part of this report begins to explore some of those issues.)

Prescription drugs. The 2003 data report a deceleration in the rate of growth in retail prescription drug spending, and this has been widely noted. Nonetheless, the reported spending—on retail prescription drugs alone 13 —reached 10.7 percent of national health expenditures, up from 10.3 percent a year earlier, 7.6 percent in 1998, and 5.8 percent in 1993. We have estimated total U.S. prescription drug spending, including drug costs in hospitals and nursing homes as well as retail. This quadruped between 1994 and 2004. Even at the new, lower rate of increase, prescription drug spending will double in seven years. Total drug spending would then reach $500 billion in 2011, the year the first baby boomers pass age 65. (The new Medicare drug benefit will accelerate this rise.) Total drug spending would then reach about 17 percent of health spending. The challenge before us is to make all existing medications affordable to all Americans who need them, while spurring breakthrough research. Happily, both can be achieved.

The report examines growing requirements for higher patient payments, described by some as “empowering consumers.” The authors conclude that this is a “pass-the-buck policy which forces patients to deny themselves care” and promotes under-insurance. The report cites evidence that this approach is not clinically safe, and cannot durably contain costs or protect needed caregivers. In addition, this leaves savings—if any—unavailable to expand coverage.

Documenting that doctors’ decisions control about 87 percent of personal health spending, the Health Reform Program report discusses why patients are the wrong target for cost controls, and physicians are key. The study concludes that to make care affordable, “Americans must rely ultimately on careful decision-making by well-informed physicians paid in ways that minimize incentives to either over- or under-serve.” To cut waste, said Socolar, the best tool is “not the bludgeon of HMO regulations, risky policies requiring sick people to pay more, or the gamble of omitting coverage for certain services, but thoughtful physician decisions about what care is appropriate for which patients.”
The nation’s precarious economy makes it urgent to develop a contingency plan for flat real health spending, the report concludes. “This means negotiating and testing political deals to balance private and public interests to win affordable, high-quality care for all. With spending
already adequate to care for all Americans, there is great reason for optimism.” The authors find that federal health officials were overly optimistic in recent statements highlighting 2003’s slightly slower health spending increases as “good news.” The report’s single-year focus also unintentionally obscured the continued unsustainable rise in health costs, Sager and Socolar assert. In addition, they note, a journal news release and some coverage erroneously called the 2003 rise the “slowest in seven years.” Although health spending’s rise for the first time in seven years did not accelerate, the new report shows that 2003 brought the third-largest percentage rise in a decade and the second-largest dollar rise ever.

Sager and Socolar said the key to controlling costs in the future may lie in changing the ways doctors make decisions. But they cautioned that before that could happen, physicians needed more information on the relative costs and benefits of different treatments.

Health Reform Program Boston University School of Public Health
715 Albany Street, 3 T W; Boston, Massachusetts 02118; 617 638 5042
www.healthreformprogram.org
http://dcc2.bumc.bu.edu/hs/Health%20Costs%20Absorb%20One-quarter%20of%20GDP%20growth%20Release%20-%20ch%E2%80%A6.pdf

Stamford officials say they will save taxpayers more than $500,000 annually by buying prescription drugs in bulk with a statewide coalition of municipalities and school districts.

The combined buying power of 51,000 employees from 11 municipalities and two school districts is expected to shave 11 percent off Stamford's prescription drug costs.

Last Tuesday, about 2,500 city employees and retirees switched from Health Net to the Connecticut Public Section Coalition's plan with Medco Health Solutions Inc. of New Jersey. The move is expected to save the city about $500,000 a year in drug costs and $120,000 in administrative costs.

"This doesn't assume any increase on co-payments, and there are no restrictions on drugs," said Dennis Murphy, director of the city's human resources division. "The magic here is simply the savings of buying in bulk."

Employees' co-payments, which range from $5 to $15, depending on the drug, have stayed the same, he said.

Officials say Medco, a spin-off of Merck & Co., can negotiate lower prices with pharmaceutical companies because it buys in massive quantities and gets a volume discount.

The savings will be passed to employees who must contribute to the cost of their medical coverage, Murphy said. Employees now pay $4 to $12 a week for single coverage and $10 to $31 a week for family coverage. Besides a traditional health plan, city employees get dental, eyeglass and prescription drug coverage.

Prescription drug costs have been rising more than 10 percent each year and cost Stamford about $4.5 million a year. The city is self insured, which means it reimburses its prescription drug plan administrator for every drug purchased.

In Norwalk, where all city employees except firefighters switched from Cigna to the Medco plan Jan. 1, Mayor Alex Knopp said the volume discount is expected to save $234,000 a year -- 12 percent of the city's prescription drug costs.

Danbury, Waterbury, Bridgeport, Middletown, Meriden, East Hartford, Manchester, Windsor and Windsor Locks are part of the coalition. Participating towns were asked to contribute $7,500 each to cover the cost of bidding and cost-benefit analysis.

East Hartford Finance Director Michael Walsh said his town would save 8 percent by switching 1,500 town and school employees to the plan.

"For a $7,500 investment, we will receive a projected $156,000 return," he said.

East Hartford was set to switch to Medco when its existing drug plan administrator, Blue Cross Blue Shield, made a last-ditch effort to keep the contract and lowered its rates, Walsh said.

He said he still is inclined to go with the coalition's plan, though he wants to see Blue Cross Blue Shield's best offer before he signs.

The coalition's plan does not depend on any one municipality's participation, Walsh said -- anyone can opt out if it gets a better deal elsewhere.

Stamford officials, who organized the coalition, said they hope word spreads about the volume discount and other towns sign on.

"The more that join in, the more benefits that are realized," Murphy said.

Stamford personnel specialist Fred Manfredonia said about two dozen municipalities were interested in the coalition but only 11 signed on. Part of the challenge is that each municipality has multiple labor contracts and different purchasing requirements, he said.

The Stamford Board of Education was among those invited to participate but declined, he said. Board of Education Director of Human Resources Scott Macdonald did not return a phone call last week.

Manfredonia said the coalition's next step is to research the cost of buying life insurance in bulk.

By Donna Porstner
The Stamford Avocate www.stamfordadvocate.com
http://www.stamfordadvocate.com/news/local/scn-sa-drugs6feb07,0,1806314.story?coll=stam-news-local-headlines

New research from Resources for the Future (RFF), in collaboration with colleagues at the National Institutes of Health and Princeton University, highlights the need for a regionally coordinated investment plan among hospitals to prevent transmission of hospital-acquired infections.

Antibiotic resistance in these infections is becoming more frequent. According to the research, recently published in the Proceedings of the National Academy of Sciences, the proliferation of drug-resistant pathogens in hospitals is a serious public health threat that has economic as well as biological causes. The problem is likely to be worse in areas with greater concentrations of medical treatment facilities.

"Hospitals invest in infection control based on how many patients are already infected, and how transmissible the pathogen is," stated Ramanan Laxminarayan, RFF fellow and co-author of the report. "Hospitals in areas with more facilities will likely each invest less, on average, than hospitals in areas with fewer facilities, because more facilities in an area mean less control that each hospital has over overall levels of resistance."

In areas where there are more hospitals, investment is lower not only because shared patients and staff increase the rate of transmission, but also because hospitals will assume other facilities will cover the costs. For any given facility, there is no guarantee that investment in preventing the transmission of hospital-acquired infections will actually pay off, since patients and staff coming from other local facilities could inadvertently undermine those efforts.

"Under the current system, there's no point in asking individual hospitals in urban areas to spend more on transmission prevention," Laxminarayan noted. "The only way to guarantee results is to implement a coordinated investment plan for hospitals in a region, so all parties have a vested interest in holding up their end of the bargain, and can be held accountable for failing to do so."

Laxminarayan commented that he and his colleagues at the National Institutes of Health and Princeton University are now working to put together region-specific information to give healthcare facilities in urban areas more concrete advice on coordinating investments.

Resources for the Future, an independent and nonpartisan Washington, D.C., think-tank, seeks to improve environmental and natural resource policymaking worldwide through objective social science research of the highest caliber.
For a copy of the paper: Leikny Johnson, 202-334-1310

http://www.rff.org/rff/News/Releases/2005Releases/Antibiotic-Resistance-to-Hospital-Acquired-Infections-Increasing.cfm
www.rff.org