IAHCSMM annual meeting report

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					June 27, 2011

$788,000 paid to doctor accused of faking study

Medtronic said on Wednesday that it had paid nearly $800,000 over an eight-year period to a former military surgeon who has been accused
by the Army of falsifying a medical journal study involving one of the company’s products. The surgeon, Dr. Timothy R. Kuklo, claimed in the
study that the use of a Medtronic bone growth product called Infuse had proved highly beneficial in treating leg injuries suffered by American
soldiers in Iraq.

The British medical journal that published the article retracted it this year after an internal Army investigation found that Dr. Kuklo had forged
the names of four other doctors on the study and had cited data that did not match military records. Other doctors at Walter Reed Army
Medical Center, where Dr. Kuklo worked until August 2006, said that he had also overstated the benefits of the Medtronic product.

Dr. Kuklo, who now works as an assistant medical professor at Washington University in St. Louis, has repeatedly declined to comment on
the situation.

Medtronic has said it was not involved in any way with the challenged report. The company is under investigation by the Justice Department
and Senator Charles E. Grassley, Republican of Iowa, in connection with possibly illegally marketing of Infuse through outside physicians like
Dr. Kuklo who work for it as consultants. The company has denied doing so. Last month, it suspended Dr. Kuklo’s consulting contract.

In the last few weeks, Medtronic, which initially declined to say what it had paid Dr. Kuklo or even when it had hired him, has been under
growing pressure from Senator Grassley to disclose its financial ties to Dr. Kuklo. In information released on Wednesday, Medtronic said that
it made about $788,280 in direct payments to Dr. Kuklo between 2001 and 2009.

It described those funds as either reimbursement for travel expenses, or payments for speaking or training other doctors on Medtronic’s
behalf, or for consulting. The company said that those consulting services included working on the design of new or existing orthopedic
products and surgical instruments. The company also said that from 2001 to 2007, it made about $64,000 in indirect payments to Dr. Kuklo
in connection with attendance at medical meetings and other events.

It is legal for military doctors to receive payments from medical products companies, but they are supposed to seek permission from officials.
Army officials have said they have not found records to indicate that Dr. Kuklo sought or received such clearance. (NY Times)
http://www.nytimes.com/2009/06/18/business/18surgeon.html?ref=health

Judge orders Scrushy to pay shareholders $2.8B

An Alabama judge has ordered former HealthSouth CEO Richard Scrushy to pay about $2.8 billion to shareholders due to accounting fraud
at the rehabilitation chain. Circuit Judge Allwin E. Horn ruled Thursday in favor of HealthSouth shareholders who filed a lawsuit claiming
Scrushy was involved in a massive accounting fraud that nearly sent the company into bankruptcy.

Scrushy was acquitted in a federal criminal case over the fraud and testified in the state civil case that he knew nothing about it. (Boston
Globe) http://www.boston.com/business/healthcare/articles/2009/06/18/judge_orders_scrushy_to_pay_shareholders_28b/

Cardinal Health Foundation awards $1 million to fund patient safety initiatives

The Cardinal Health Foundation announced it has awarded a total of $1 million in grant funding for new and innovative programs to improve
patient safety at 35 hospitals, health systems and community health clinics across the country. Grants of up to $35,000 per facility will
provide funding for programs that implement creative and replicable methods to improve the quality of patient care. Examples of initiatives
that received funding include: targeted screening for methicillin-resistant staphylococcus aureus (MRSA), strategies to improve physician
hand hygiene, electronic medical record implementation and medication safety and reconciliation projects.
The primary criterion for awarding the grants was that they address the National Quality Forum’s priority areas, specifically concentrating on
the following areas: Eliminating healthcare associated infections (HAIs), specifically MRSA and C. difficile infection prevention and
management, with the goal of reducing ventilator-associated pneumonia (VAP), surgical site infections (SSI) and blood site infections (BSI)
to zero; Medication safety and reconciliation in forms ranging from prescribing correct medication to ensuring the right medication gets to the
right patient at the right time and assuring information is communicated and understood at key transition points. To learn more, visit
http://www.cardinalhealth.com/content/news/6172009_143026.asp

Greensboro hospital: 33 babies feared exposed to swine flu

More than 30 infants born prematurely at a North Carolina hospital are being given precautionary swine flu treatments after officials said
Wednesday a respiratory therapist may have exposed them to the virus. Moses Cone Health System officials said none of the 33 babies at
the neonatal intensive care unit at the Women’s Hospital of Greensboro has symptoms of the disease. Medical Director Dr. Tim Lane said
the infants are still being quarantined from other babies and are being treated with Tamiflu as a precaution.

“We’re taking them as a group,” Lane said of the separation. “We don’t know for sure if any of those babies are infected or not.”

Lane said the babies were treated this week by a respiratory therapist who five days earlier had treated an adult patient at Moses Cone
Hospital in Greensboro for possible asthma. The male patient later tested positive for the H1N1 virus. The therapist had worked a 12-hour
shift in the babies’ unit Monday when health officials contacted her the next day about her exposure to the patient. She said she had been
sick over the weekend but felt fine when she came to work.

Chief Nursing Officer Joan Wessman said it’s common for respiratory therapists from the five-hospital system to travel to different locations
and treat patients of different ages.

The therapist is now at home and is being treated with Tamiflu while the hospital waits for lab results. State health officials will have those by
either Thursday afternoon or Friday morning. (Associated Press – WRAL) http://www.wral.com/news/state/story/5379776/

Ascension health names Scott Caldwell as Chief Supply Chain Officer

Ascension Health, the nation’s largest Catholic and nonprofit health system, has named Scott Caldwell as Chief Supply Chain Officer,
responsible for supply chain strategy and operations. He has more than 25 years of successful supply chain leadership and an extensive
background in supply chain logistics, contracting, complex operating room delivery systems, waste management, cost process controls and
cost/use reduction efforts with physician preference items. Caldwell has held several management positions for healthcarerelated consulting
firms and suppliers after a successful tenure in the hospitality industry. Most recently, he was with Deloitte Consulting LLP. Caldwell holds a
bachelor’s degree in general management and a master’s degree in business administration from the University of Tennessee.

EPA to move aggressively on cleanup and HHS to assist area residents with medical care

U.S. Environmental Protection Agency Administrator Lisa P. Jackson announced the agency has determined that a public health emergency
exists at the Libby asbestos site in northwest Montana. Over the past years, hundreds of asbestos-related disease cases have been
documented in this small community, which covers the towns of Libby and Troy.

This is the first time EPA has made a determination under the Comprehensive Environmental Response, Compensation, and Liability Act
(CERCLA) that conditions at a site constitute a public health emergency. This determination recognizes the serious impact to the public
health from the contamination at Libby and underscores the need for further action and healthcare for area residents who have been or may
be exposed to asbestos. Investigations performed by the Agency for Toxic Substance and Disease Registry have found the incidence of
occurrence of asbestosis, a lung condition, in the Libby area staggeringly higher than the national average for the period from 1979-1998.
EPA is working closely with the Department of Health and Human Services, which is making available a short-term grant to provide needed
asbestos-related medical care to Libby and Troy residents.

During her Senate confirmation hearing, Administrator Jackson committed to review the situation at the Libby asbestos site based on current
site information, sound science and EPA’s legal authorities. As a result of her review, the Administrator has decided that conditions at the
site present a significant threat to public health and that making a public health emergency determination is appropriate.

HHS Secretary Kathleen Sebelius tasked two HHS agencies – the Health Resources and Services Administration and the Centers for
Disease Control and Prevention/Agency for Toxic Substances and Disease Registry – to help county residents. These two agencies will
support a new grant to assist affected residents who need medical care. Local officials are currently putting together a grant proposal that will
lay out options for provision of medical care that will work for the residents of Lincoln County. HHS anticipates that this grant can be awarded
in August 2009.

The Libby asbestos site has been on the EPA’s Superfund National Priorities List since 2002, and cleanup has taken place since 2000. EPA
has made progress in helping to remove the threat of asbestos in the land and air, and with it, the increased risks of lung cancer, asbestosis,
and other respiratory problems. While EPA’s cleanup efforts have greatly reduced exposure, actual and potential releases of amphibole
asbestos remain a significant threat to public health in that area. For more information visit http://www.epa.gov/libby

Skytron honored by Premier healthcare alliance as a 2009 repeat award winner exceeding performance expectations

Skytron is pleased to announce that it is a consecutive year, repeat winner of the Supplier Performance Award, presented by Premier
Purchasing Partners, LP, the group purchasing unit of the Premier healthcare alliance.

Premier contracts with more than 800 suppliers and Skytron is one of 45 contracted suppliers to receive the Performance Award. Winners
are recognized for their outstanding management of Premier agreements and drive toward the mutual goal of providing clinical and financial
value to the not-for-profit hospitals that are members of the Premier alliance.

Premier's Performance Award applauds the efforts of contracted suppliers to meet and exceed operational expectations. In selecting
recipients, satisfaction and performance data are collected and scored over four successive calendar quarters. Feedback is provided during
regular supplier business line reviews. Organizations scoring 80 percent or higher earn the Performance Award. For more information visit
http://www.premierinc.com/about/news/awards/index.jsp

Xerox’s eco-friendly office products featured in 2 Novation group buys

U.S. hospitals generate approximately 6,600 tons of waste per day. To help members of VHA Inc., University HealthSystem Consortium
(UHC) and Provista minimize their environmental impact, Novation has included Xerox eco-friendly office products in its period 2 national
group buys effective June 1– Sept. 30, 2009.

Members are able to select from Xerox’s array of award-winning color and black-and-white printers, copiers and multifunction printers.
Xerox’s proprietary line of eco-friendly solid ink printers use cartridge-free solid ink sticks, which require minimal packaging and generate 90
percent less waste than comparable laser printers. Using solid ink printers could have an immediate financial impact.

In addition to savings off of list price, the group buy also offers members additional value opportunities. Added values include further savings
on supplies, free upgrades for purchases of greater quantities, and extra one-year warranty. Special leasing options are available on models
over $2,000. Visit www.novationco.com.

Healthcare cuts could shift costs, private sector may face greater burden, economists say

President Obama's plan to rein in federal spending on healthcare could end up shifting costs to the private sector, economists say. Unless
doctors and hospitals are able to respond to the government cuts by becoming more efficient, the result could be higher costs for insurers,
employers, and people with private medical coverage, they say.

Depending on the circumstances, hospitals may have the motive and means to "transfer those charges to somebody else," and "we'll see
costs increasing on the private side and not necessarily falling everywhere," said Harold S. Luft, director of the Palo Alto Medical Foundation
Research Institute.

The biggest healthcare proposal that Obama announced last weekend is especially likely to move costs to the private sector, because it
would cut Medicare payments without giving hospitals the tools to deliver care more cost-effectively, Luft said. The administration predicts
that measure -- adjusting Medicare payments to reflect productivity changes in the overall economy -- would save the government $110
billion over 10 years.

A report issued Tuesday by the Congressional Budget Office portrayed that outcome as speculative. There is no guarantee that the
healthcare system's response to pressure would be greater quality or efficiency, according to the CBO analysis. Throwing cold water on
hopes for effective healthcare reform, the CBO described a variety of problems that could make it hard to slow federal spending on care --
and to do so without putting quality at risk.
"At this point, experts do not know exactly how to structure such reforms so as to reduce federal spending on healthcare significantly in the
long run without harming people's health," the CBO said. "Examples of efficient care certainly exist today…Yet applying the methods of those
efficient providers throughout the healthcare system cannot be accomplished through fiat or good intentions," it added.

Some steps that might prove cost-effective over the long run do not necessarily mean savings for the federal budget. Conversely, some
steps that save the government money would not necessarily translate into overall reductions in national healthcare spending.

If Medicare cuts payments to hospitals but the costs of treating patients stay the same, "then you have the potential for cost-shifting," said
Kenneth E. Thorpe, a professor of health policy at Emory University. But Obama is trying to implement policies "that would lead to hospitals
reducing their expenditures," he said.

One of the president's signature proposals would reward hospitals for reducing readmission rates and penalize hospitals whose patients
must return for another stay because they did not receive adequate treatment the first time. That proposal is unlikely to create a bulge in
private medical costs, because it would lead hospitals to change the way they function, Thorpe said. The administration is counting on
improved readmission rates to save the government $25 billion over 10 years.

Not all hospitals would have the ability to foist additional costs onto the private sector. The consolidation of hospitals in many communities
limits private insurers' ability to push back.

Cutting payments by Medicare, the federal program for the elderly, is a relatively blunt instrument of reform. "Imposing slower growth in
[Medicare] payments would create ongoing pressure on providers to identify and adopt efficiencies; it would also, however, create risks for
providers and patients if the efficiency gains were not achieved," the CBO said.

Increasing access to preventive care, for example, is widely considered a powerful way to reduce spending, but "one study of health and
economic effects of preventive services found that only 20 percent of the services that were assessed yielded net financial savings," it said.
In some instances, the cost of delivering preventive care to a large population would actually exceed the savings on the relatively few people
who avoided illness as a result, CBO said. (Washington Post) http://www.washingtonpost.com/wp-
dyn/content/article/2009/06/17/AR2009061703671.html

				
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