Lasik Surgery Sales Tactics Raise Eyebrows

The Washington Post reports that one of the largest national chains of laser eye surgery clinics pays sales commissions to at least some of its "patient counselors," who seek to collect nonrefundable deposits from customers before they have been briefed on all possible risks of the procedure, according to former employees, customers and company documents.

      The Tysons Corner branch of Laser Vision Institute (LVI), a 19-center chain, requires its counselors to close a deal with 75 percent of possible customers to qualify for bonuses, and the chain bases commissions on how much the patient pays. The counselors -- who screen and brief all prospective customers -- are trained in standard retail sales techniques and encouraged to emphasize the benefits and defer questions about risks to trained medical personnel, whom patients generally see only after committing to the surgery.

      LVI is not the only firm that rewards employees for closing deals and meeting sales goals for Lasik surgery, the most popular type of laser vision correction. Executives at most area laser eye centers, including the local offices of two other national chains -- TLC and LasikPlus -- say they either have offered or are considering employee bonuses linked to the center's financial performance.

      LVI Chief Executive Max Musa defends his company's approach, saying patient counselors do not discuss surgical complications and risks in detail because they are not medically trained to do so. Musa also said the counselors do not pressure patients. The incentive system is simply designed to motivate counselors "to be more enthusiastic," Musa said.

      Higher-pressure sales practices are becoming more common in the laser eye surgery market, which has grown during the past five years from an obscure ophthalmological specialty into a mainstream service. Since Lasik is an elective procedure, consumers must be convinced to have the surgery.

      Ethicists say aggressive sales practices raise questions about consent, disclosure and a consumer's ability to make a fully informed decision, free from sales pressure, about the surgery's risks and benefits. Requiring a nonrefundable deposit before the full presentation of risks "undermines the whole notion of free, voluntary consent," said George Annas, chairman of the Health Law Department at the Boston University School of Public Health.

      Lasik surgery involves slicing the outer layer of the cornea and using a special laser to reshape the middle layer, permitting the eye to focus better. Most Lasik patients have good outcomes and no serious complications. A minority suffer blurred or reduced vision either temporarily or permanently, and a rare few have had corneal perforations or have required corneal transplants.

      About 1,000 laser centers in the United States performed Lasik on 1.6 million eyes during the year that ended in March, with an annual revenue of more than $2 billion, according to David Harmon, a laser eye surgery market analyst. Nine centers operate in the Washington metropolitan area. LVI, the fifth highest volume Lasik chain in the country, performed 3,484 procedures in its Tysons Corner office during the first seven months of the year, according to a company memo.

      LVI advertises surgery for $499 per eye, but the counselors receive higher commissions if patients do not qualify for the lowest fee or if they elect a more costly option. According to a memo detailing the company's "Patient Counselor Bonus Plan Effective 8/1/01," LVI counselors receive per-eye bonuses of $1 for patients who pay $499 an eye, $2 for those who pay $599, $6 for those paying $799, $16 for $999 and so on, up to $40 for those who pay $1,599. To be eligible for the bonuses, the memo states, counselors must "close," or collect deposits from, at least 75 percent of their patients. Back to TOC.

Researchers Say Embryos in Labs Are Not Available

The New York Times, write that if scientists want to develop new supplies of embryonic stem cells, they may have to take the controversial step of creating human embryos expressly for research. If they want to develop new supplies of embryonic stem cells, they may have to take the bold and controversial step of creating human embryos expressly for research.

      Tens of thousands of embryos are frozen at fertility centers, and a wide spread assumption in the debate over stem cell research has been that scientists can use them. But in clinics around the country, embryologists and doctors tell the same story: almost every embryo is spoken for. The vast majority of couples use their frozen embryos, or plan to use them, in attempts at pregnancy. It may be that embryos will become available if there are concerted efforts to encourage couples to donate them. But so far, very few couples have agreed to do so.

      An alternative, creating human embryos and nurturing them solely for experiments that will destroy them leaves even many supporters of the research deeply uneasy. The issue comes up when scientists try to develop new stem cells, abroad or with private money. Some say this is necessary because the existing lines are insufficient and may not be safe for human use.

      Some clinics routinely ask patients if they want to donate embryos for research. Others--the majority, fertility experts say--do not ask.

      One clinic that asks is the Institute for Reproductive Medicine and Science of St. Barnabas Medical Center in Livingston, N.J., one of the nation's largest fertility centers. Embryologists there have frozen 11,402 embryos since August 1995, from a total of 1,595 patients. Many used their embryos. One woman gave hers up for adoption, which was privately arranged. That left 6,284 in storage, from 1,006 patients. Of those patients, 191 signed or said they would sign a form directing that their embryos be discarded. But only 22 patients signed or indicated a desire to sign a form allowing their embryos to be used for research.

      Patients at the Jones Institute for Reproductive Medicine of Eastern Virginia Medical School, another large center, are also asked to donate embryos for research. Embryologists there froze about 15,000 embryos in the last 15 years, two-thirds of which were used by the couples that owned them. About 200 embryos might be available for research according to forms signed by patients, said Dr. William Gibbons, a reproductive endocrinologist there. And that, he said, might not be enough to generate any stem cells. According to Gibbons, even if scientists did want to use frozen embryos at fertility centers, there would be hurdles to overcome, Dr. Gibbons said. Each patient who has agreed to donate embryos must be contacted and agree to the particular stem cell project. Then scientists must buck the odds in getting the embryos to grow and isolating stem cells from them. Back to TOC.

AMA Pushes Ethics Guidelines About Gifts

The American Medical Association is mounting a new educational campaign costing $1 million to educate doctors about its ethical guidelines against accepting gifts from drug companies – but most of the funding for the effort is coming from drug companies.

      Nine large pharmaceutical companies are contributing a total of about $675,000 to help pay for the campaign, which is aimed at medical students, physicians-in-training and drug company sales representatives as well as practicing doctors, said Alan R. Nelson, a former AMA president and a special adviser to the American College of Physicians.

      Nelson defended the AMA's decision to accept grants from the drug industry to publicize the ethical guidelines, which allow company funding of educational conferences but advise doctors against accepting gifts of more than minimal value from drug companies.

      Companies have partially cut back on such practices but still commonly provide doctors with free drug samples, pens, notepads and other gifts. Wolfe said there is considerable evidence that accepting gifts from drug companies influences doctors' prescribing patterns. Imagine that! Back to TOC.

IVF Clinic to Supply Embryos to Harvard

A fertility clinic will give embryos to Harvard in a deal that could make the university one of the world's top suppliers of embryonic stem cells. Boston IVF, a Waltham-based organization of fertility clinics, said it has thousands of frozen embryos that could provide stem cells. The firm said it plans to begin contacting donor couples for permission to use their embryos so Harvard scientists can extract stem cells.

      The Howard Hughes Medical Institute will finance the arrangement between the school and the clinic. Melton is on the staff of the Maryland-based private foundation. The institute will give Boston IVF $180,000 over two years to cover the cost of providing the embryos. The newspaper said it is not clear how much Harvard will get for extracting and preserving the stem cells.

      Fertilized eggs, or embryos, are often left over from fertility treatments. Some scientists believe that stem cells can be coaxed to grow into any kind of cell, and might help cure diseases like diabetes, Alzheimer's and Parkinson's.

      Boston IVF serves about a thousand couples a year, and has helped conceive about 7,500 babies in five years. It stores all unused embryos in giant liquid nitrogen freezers.

      Massachusetts law requires oversight by a scientific ethics board for donation of embryos. Harvard's institutional review board will monitor the deal with Boston IVF. Back to TOC.

In This Issue--Also See Archive

Lasic Sales Tactics Raise Eyebrows

The Washington Post reports that one of the largest national chains of laser eye surgery clinics pays sales comm...

Embryonic Stem Cell Debate

The New York Times, write that if scientists want to develop new supplies of embryonic stem cells, they may...

AMA Cautions on Gifts

The American Medical Association is mounting a new educational campaign costing $1 million to educate doc...

IVF Deal for Harvard Embryos

A fertility clinic will give embryos to Harvard in a deal that could make the university one of the world's top...

Johns Hopkins Ethics Under Fire

Johns Hopkins University, one of the world's top medical research institutions, has come under fire over a deadly...

HMA Posts Record Q3 Net

Health Management Associates, Inc. announced net income for the quarter ended June 30, 2001 increased 24%...

AMERIGROUP & Humana Ink Deal

AMERIGROUP Texas, Inc., the Texas health care subsidiary of AMERIGROUP Corporation, and Humana

US Oncology Q2 Earnings Healthy

US Oncology Inc. announced results for the second quarter ended June 30, 2001. Net patient revenues...

Johns Hopkins Under Fire Over Ethics

Johns Hopkins University, one of the world's top medical research institutions, has come under fire over a deadly asthma experiment and a lead-paint study on poor city children that has been likened to the infamous Tuskegee syphilis experiment. The incidents have raised questions about whether medical institutions undertake more research than they can safely monitor.

      After healthy 24-year-old volunteer Ellen Roche died after inhaling a drug in the asthma study in June, the federal Office for Human Research Protections said, among other things, that Hopkins' review board was overworked. The government shut down most of Hopkins' 2,400 federally funded experiments for five days, an action the university called unwarranted. Regulators are allowing the studies to resume one at a time.

      Two weeks ago, the Maryland Court of Appeals condemned a study testing levels of lead-paint exposure in poor children by the Kennedy Krieger Institute, a Hopkins affiliate. The ruling permitted lawsuits filed on behalf of two children who allegedly suffered brain damage to go forward.

      In the study, landlords were paid to recruit about 100 families with healthy children to live in their homes during the early 1990s. Children - who can develop brain damage if they eat lead paint chips - were to be tested periodically to see how well methods developed to reduce the levels of lead-based paint were working.

      Judge Dale R. Cathell likened the research to experiments conducted on prisoners at the Buchenwald concentration camp during World War II and to the Tuskegee Syphilis Study, in which the disease was left untreated in poor black men in Alabama. All U.S. research institutions are required to have review boards by the federal government, which sets and oversees the guidelines. The review boards - which consist largely of university-affiliated doctors and administrators - are there to weigh the potential risks and benefits of various experiments and to make sure that subjects have been properly informed and have given their consent.

      Alan Milstein, an attorney who sued the University of Pennsylvania on behalf of the family of an 18-year-old man who died in a 1999 gene therapy experiment, said centers such as Hopkins are "conducting more studies than they can possibly monitor.''

      Johns Hopkins stands tall among medical research institutions. Its doctors developed CPR and won the Nobel Prize for discovering enzymes that gave birth to the genetic engineering industry. For the 11th year in a row, U.S. News & World Report ranked it the top American hospital. Its medical school ranked second to Harvard. Last year, Hopkins received $301 million in grants from NIH. Back to TOC.

Health Management Associates, Inc. Reports Record 3Q Net Income Growth of 24%

Health Management Associates, Inc. announced net income for the quarter ended June 30, 2001 increased 24% to $54.1 million, up from $43.8 million for the same quarter a year ago. Earnings per share(diluted) for the quarter were $.21 per share, up from $.18 per share, on a 7.5% increase indiluted shares outstanding. Net patient service revenue grew a solid 21% to $473.2 million for the quarter ended June 30, 2001, up $82.1 million from $391.1 million for the same period a year ago.

      Net patient service revenue at hospitals owned and operated by HMA for one year or more was up 9.5%. This quarter represents the 51st consecutive quarter of same hospital revenue growth. Among the factors contributing to the growth were a strong 6.7% increase in admissions and a 4.8% increase in surgeries. Same store hospital EBITDA margins increased 30 basis points to 27.0% from 26.7% for the same period a year ago. Continued investment in emergency room services, including our innovative Nurse First and ProMed programs, contributed to a 6.9% growth in same hospital emergency room visits, compared to the same quarter last year.

      For the nine months ended June 30, 2001, net earnings, before non-cash, non-recurring charges, increased to $153.4 million compared to $128.6 million for the same period a year ago, or 19.3%. Diluted per share earnings for the period, before non-cash, non-recurring charges, were $.60 on 264.0 million shares as compared to $.53 on 244.9 million shares outstanding a year ago. The Company reported total net patient service revenue for the period of $1,388.6 million, an increase of 19% from $1,169.8 million in the comparable nine-month period. Enhancing the Company's growth opportunities, during the quarter, the Company completed the acquisition of the 200-bed CarlisleHospital in Carlisle, Pennsylvania. This sole community provider currently generates $60 million in net revenues. Back to TOC.

AMERIGROUP and Humana Finalize Houston Medicaid Business Deal

AMERIGROUP Texas, Inc., the Texas health care subsidiary of AMERIGROUP Corporation, and Humana Health Plan of Texas, Inc, a subsidiary of Humana Inc. have finalized the acquisition of Humana's Houston-area STAR (Medicaid) HMO product by AMERIGROUP Texas.

      This transaction results in the conversion of more than 21,000 Humana STAR health plan members in Texas's Brazoria, FortBend, Galveston, Harris, Montgomery and Waller Counties from Humana to AMERIGROUP Texas, Inc. AMERIGROUP Texas will now provide health care coverage to more than 175,000 Texas Medicaid, CHIP and SSI members, of which more than 85,000 are in Houston.

      Humana Inc. is a large, publicly traded health services companies with approximately 6.5 million medical members located primarily in 18 states and Puerto Rico. Humana offers coordinated health insurance coverage and related services through traditional and Internet based plans -- to employer groups and government- sponsored plans. Back to TOC.

US Oncology Reports Second Quarter 2001 EPS of $0.13

US Oncology Inc. announced results for the second quarter ended June 30, 2001. Net patient revenues for the second quarter increased 15 percent to $489 million from $425 million reported in the comparable quarter last year. Company revenue for the second quarter increased 17 percent to $380.8 million from $326.5 million reported in the comparable quarter last year. Net income was $12.7 million, or $0.13 per share, in the second quarter 2001 compared to $10.0 million, or $0.10 per share ($11.9 million, or $0.12 per share, excluding one-time charges), during the same period in 2000.

• The key financial indicators of USON's successful implementation are as follows:
• Operating Cash Flow reached an all time high of $64.8 million for the second quarter, up from $42.9 million for the first quarter of 2001, compared to $17.9 million for the second quarter of 2000.
• Accounts Receivable Days Outstanding decreased to 58 in the second quarter, down from 65 in the first quarter of 2001.
• Long-Term Debt was reduced by $52.8 million during the second quarter and by a total of $72.5 million during the first six months of 2001.
• Field EBITDA increased to $164.6 million during the second quarter, up from $160.4 million for the first quarter of 2001, compared to $154.8 million for the second quarter of 2000.

EBITDA for the second quarter increased to $45 million, up from $42.5 million during the first quarter of 2001, compared to $45 million for the second quarter of 2000. USON received 34 percent of Field EBITDA in both the first and second quarters of 2001, compared to 36 percent during the second quarter of 2000.

      US Oncology is a major operator of outpatient cancer-treatment facilities. The US Oncology network of physicians and Cancer Centers offers patients access to the full range of cancer-treatment services -- medical oncology, hematology, radiation oncology, gynecologic oncology and diagnostic radiology. Back to TOC.