Still to be voted on late Sunday night was a companion bill making changes to the Senate bill, a measure necessary to attract support in the House. After House approval, those changes still need to go before the Senate.

President Barack Obama, who staked his presidency on the health-care overhaul, helped push it toward passage with a last-minute promise to issue an executive order making clear that no money dispensed under the $940 billion bill would pay for abortions. That persuaded Rep. Bart Stupak, a holdout Michigan Democrat, to vote yes and bring at least seven colleagues with him.

It was a tumultuous sprint to the finish for legislation that has brought Washington many dramas over the last year, ranging from a Christmas Eve Senate vote to the surprise January election of Massachusetts Republican Sen. Scott Brown that upended Democrats’ plans.

“It makes me so happy that, after 100 years, we can finally catch up with the rest of the world,” Rules Committee Chairwoman Louise Slaughter, a New York Democrat, said as House leaders became confident they had the votes for passage.

Rep. John Shadegg (R., Ariz.) said the legislation represents an overreach by the government. “This bill will destroy freedom, and do incredible damage to the very fabric of our society,” he said.

Republicans hope to use the health overhaul to drive Democrats into the minority, citing polls that show a plurality of Americans oppose it, while Democrats believe the immediate benefits brought by the bill will work to their credit.

The legislation will extend health coverage to 32 million Americans now without insurance, according to the Congressional Budget Office. It will mandate that almost every American carry health insurance—a provision that opponents are set to challenge in the courts. To help people get covered, the legislation expands Medicaid, the federal-state health program for the poor, and gives subsidies to families making as much as $88,000 a year.

Democrats are highlighting popular provisions, such as one that requires insurance companies to accept all comers, even people who are already sick. Republican critics are stressing new taxes in the bill and trims to Medicare spending needed to fund the subsidies.

The broad Senate bill was set to become law quickly following House passage. Some uncertainty remained over the package of changes, which are expected to go to the Senate later this week. Senate Democratic leaders said they had the votes to approve it, but Republican efforts to torpedo it or change it could complicate passage. The changes would boost the value of the subsidies and nullify special deals for some senators that caused a storm of protest.

The CBO estimates the package will hold the federal budget deficit $143 billion lower over 10 years than it would otherwise be. Republicans called the estimate unrealistic. The CBO also estimated that 95% of legal U.S. residents would have insurance by 2019, up from 83% today.

The march toward action Sunday was greeted by protests from hundreds of Tea Party activists, who filled the Capitol grounds, and Republican complaints about the last-minute bargaining among Democrats. “Where has the transparency been? Why all the back-room deals?” asked Rep. Jack Kingston (R., Ga.).  

The focus Sunday was largely on resolving the abortion dispute. Several Democrats, led by Rep. Stupak, had been withholding support, saying the legislation didn’t go far enough to keep federal funds from being used to pay for abortions. They praised Mr. Obama’s executive order, while Roman Catholic bishops and other antiabortion groups said it wasn’t good enough.

Insurers will see the heaviest regulations, with new rules that dictate how much they can reap in profit and whom they must cover.

Hospitals, doctors, drug makers and the seniors group AARP backed the overhaul, saying it will reduce the growth of health costs and make sure no one goes without care..

“This is not about health care,” said Rep. James Clyburn of South Carolina, the House Democratic whip. “It’s about trying to extend a basic fundamental right to people who are less powerful.”

Francee Levin, a 57-year-old artist in Columbia, S.C., said she couldn’t get health insurance after she was hit by a drunk driver. “I think I’ll be able to get some kind of health insurance, which would be a godsend,” she said.

But Catherine Calhoun of Saint Francisville, La., said she worried her husband’s employer might drop coverage and force the family to go into newly created health-insurance exchanges to get coverage. That might force her to find new doctors for her 7-year-old son, Billy, who has a rare bone disease, she said.

“I might end up having to negotiate with someone who doesn’t have any idea what he needs just to get out of bed in the morning,” said Ms. Calhoun.

In the run-up to the vote, Mr. Obama urged House Democrats to focus on those helped by the bill and not worry about the difficult politics. “Good policy is good politics,” he said.

Republicans said they expect big gains in the fall. “I’d rather be a Republican running against his bill and saying, ‘Let’s start over,’” said Sen. John Cornyn (R., Texas), chairman of the National Republican Senatorial Committee. “This will be the defining issue in November 2010, and if it passes, in 2012 when the president runs for re-election.”

Under the legislation, consumers will see changes within months. Insurers won’t be able to place lifetime limits on coverage. Children will be able to stay on their parents’ insurance policies until their 26th birthday. The changes could be bumpy, because insurers warn they won’t be able to make them so quickly. 

The bulk of the legislation wouldn’t take effect until 2014. Once the tax credits and Medicaid expansion are in place, most Americans will be required to carry health insurance or pay a fee, topping out at either $695 a year or 2.5% of income.

Employers would have to provide affordable insurance or pay a penalty of up to $3,000 per worker. Those figures assume the Senate ultimately adopts the package of changes the House was voting on.

Tax increases needed to finance the program would hit a range of industries, from insurers to tanning services. Over the next decade, $108 billion in new fees will fall on insurers, drug makers and medical-device companies. Families earning more than $250,000 a year will pay a higher Medicare payroll tax, and see that tax expanded to investment income such as dividends. High-value insurance plans would be hit with a 40% tax starting in 2018.

As part of the second bill headed toward a vote, Mr. Obama was poised to accomplish another big goal: overhauling the federal student-loan program. It would end subsidies to banks and shift lending responsibilities to the federal government. That is part of the package of changes still requiring Senate approval.

Write to Janet Adamy at janet.adamy@wsj.com and Greg Hitt at greg.hitt@wsj.com

The developer, Osiris Therapeutics, said Tuesday that its drug, Prochymal, was no more effective, over all, than a placebo in treating a life-threatening complication of bone marrow transplantation, though certain patients seemed to be helped. Shares of Osiris, which is based in Columbia, Md., fell 34 percent, to $8.03.

Prochymal is a preparation of mesenchymal stem cells, which are obtained from the bone marrow of healthy young adults. Because the cells are derived from adults, they sidestep the ethical issues stemming from the destruction of human embryos needed to make embryonic stem cells. Unlike most other types of adult stem cells, mesenchymal cells grow well in culture, so thousands of doses can be produced from a single donation.

Stem cells, particularly in the form of bone marrow transplants, are already used in medicine. Osiris is hoping that Prochymal will become the first stem cell product approved by the Food and Drug Administration and sold as a mass-produced pharmaceutical product.

But the failure in the two trials could make it hard to reach that goal. Both trials tested Prochymal as a treatment for graft-versus-host disease, which occurs when immune cells in donated marrow attack the recipient’s organs as foreign tissue.

In one trial, in which Prochymal was used along with steroids, 45 percent of patients responded to Prochymal and steroids compared with 46 percent who had a response to steroid and a placebo.

In a second trial, in which Prochymal was tested in patients who were not benefiting from steroids, 35 percent of those getting the drug had a resolution of graft-versus-host disease for at least 28 days, compared with 30 percent getting the placebo. The difference was not statistically significant.

Osiris said, however, that in the second trial, the drug did provide a statistically meaningful benefit in patients having graft-versus-host disease that specifically affected their livers or their gastrointestinal tracts.

C. Randal Mills, the company’s chief executive, said he hoped the drug could be approved for those patients, given the seriousness of the disease. “Prochymal is having a clear effect in the liver, and that is the most underserved patient population,” he said in an interview.

But the F.D.A. is usually reluctant to approve a drug based on its working in only a subset of patients.

In March, Osiris stopped enrollment in a trial testing Prochymal as a treatment for Crohn’s disease, saying it was unlikely the drug would be better than a placebo, because of a high positive response to the placebo. Genzyme has the right to sell Prochymal outside the United States and Canada.

Dr. Darwin J. Prockop, an expert on mesenchymal stem cells who was not involved in the trials, said there were still a lot of unknowns about how the cells work. “Understanding it well enough to translate to the clinic — that’s the hurdle we’re at,” said Dr. Prockop, who is director of the Institute for Regenerative Medicine at Texas A&M Health Science Center.

A national survey for the Indiana University Center for Health Policy and Professionalism Research and the Indiana University Center for Bioethics says about six out of 10 Americans — 78 percent of Republicans, 30 percent of Democrats, 58 percent of Independents — say they believe under healthcare reform taxpayers will have to pay for abortions, something Dr. Aaron Carroll, director of CHPPR, says is untrue.

Sixty-seven percent of Americans — 91 percent of Republicans, 37 percent of Democrats, 72 percent of Independents — say they believe wait times for healthcare services such as surgery will increase after healthcare reform.

Forty-six percent — 66 percent of Republicans, 29 percent of Democrats, 43 percent of Independents — say they believe reforms will result in healthcare coverage for all illegal immigrants. Three out of 10 Americans — 53 percent of Republicans, 14 percent of Democrats, 31 percent of Independents — say they believe after reforms the government will require the elderly to make decisions about how and when they will die.

If the White House hopes to convince the majority of Americans that they are misinformed about healthcare reform, there is much work to be done, Carroll says in a statement.

The poll of 600 U.S. adults, conducted by Market Strategies International Aug. 14-18, has a margin of error of plus/minus 4 percentage points.

Source: United Press International

On the surface the previous guidelines, set in 2001, were permissive. They allowed scientists to derive new human embryonic stem (ES) cell lines and research both home-grown and imported cell lines. But that could be done only after the research was approved, and the approval process was the stumbling block. Proposed projects needed to be approved twice — first by a local institutional review board and then by a science-ministry committee. And researchers working on human ES cells had to use separate facilities from other stem-cell research.

The upshot was a slowing down of research, some say. Roughly 50 groups have passed the application process, says Hirofumi Suemori of Kyoto University’s Institute for Frontier Medical Sciences. But that is only about a quarter of the number that he estimates originally wanted to use human ES cells, based on the number of groups that work with mouse ES cells or request materials derived from human ES cells.

Some charge that the regulations cost the country leadership in the field. It was Shinya Yamanaka of Kyoto University who, in 2006, created induced pluripotent stem (iPS) cells for the first time (K. Takahashi and S. Yamanaka Cell 126, 663–676; 2006) — produced from normal adult cells, iPS cells have the potential, like ES cells, to generate any cell type in the body. But it soon became clear that expertise with ES cells was essential for advancing iPS-cell technology, and further experiments such as comparing the properties of iPS cells and ES cells were done outside Japan. Even in the United States, where until this year federal funding was limited to ES-cell lines derived by August 2001, ES-cell research moved ahead, says Suemori. “Researchers there were able to press forward, and with that as the foundation, they also stole the lead in iPS-cell research,” he says.

The Japanese government has been slowly trying to change the restrictions. In April, a new section in the explanatory material for the old guidelines erased the requirement for separate facilities. The latest guidelines also remove the secondary approval step for working with ES cells: a local review committee must still approve the work, but researchers then need only notify the science ministry of this.

Yet some burdensome restrictions remain, says Suemori. For example, the notification must include “word-for-word” minutes of the local review committee’s meeting.

And the two-stage approval pro­cess remains for deriving new cell lines. Norio Nakatsuji, director of Kyoto University’s Institute for Integrated Cell-Material Sciences, who created all five of Japan’s human ES-cell lines, has given up plans to make any more. “I would summarize the change as being from absurd to excessively strict,” he says. “These irrational guidelines have done and will probably continue to do great damage to all related research fields in Japan.”

Last December, Yamanaka was widely quoted for remarks made at a science-ministry assembly in which he appraised Japan’s 2008 record against other iPS-cell research groups, mostly in the United States: “One win, and about 10 losses,” he said.

The new regulations were pushed through by the Council for Science and Technology Policy, a 15-person group chaired by the prime minister that stands as the country’s highest science-policy body. Junichi Iwata, of the science ministry’s life-science division, says the changes were targeted at the use of human ES cells and not their derivation, explaining that only two groups are licensed to derive such cells.

Asked why the reform didn’t go further in addressing researchers’ criticisms, he says: “The new guidelines just went into effect, so we’ll see how things go. If need be, we’ll change them again.”

But it might be too late to make a difference. Most of Japan’s stem-cell researchers have already been pushed into iPS-cell research through targeted funding programmes and are unlikely to go back to the ES-cell basics. “I do not expect a dramatic increase in ES-cell research,” says Shin-Ichi Nishikawa, a stem-cell researcher at the RIKEN Center for Developmental Biology in Kobe.

Suemori likewise sees little change and fading hope. “It will be very difficult for us to catch up now,” he says.

That the organ shortage is so great in this country that people are resorting to buying and selling kidneys is not a surprise; it probably happens more than we know. That’s because some 102,640 patients are waiting for an organ donation in the United States, according to the United Network for Organ Sharing. More than 7,000 people died last year while they awaited kidneys, hearts, livers, lungs, and intestines.

The situation is particularly dire when it comes to kidneys. A sharp increase in diabetes rates in this country has fueled demand; there are now more than 80,000 people on the official waiting list for a kidney transplant. Reports are that thousands of other patients–those that aren’t in bad enough condition to warrant a spot on the official list—could benefit from a kidney.

Last year only 16,517 of those in need of kidneys received transplants; 10,550 were cadaver organs and close to 6,000 came from living donors who most often were relatives or friends of the recipients. With an average wait time of 5 years on the official list for a cadaver organ, about 11 patients die each day awaiting a kidney.

Because kidneys can be donated by healthy, live donors with little long-term impact on their physical health, there has been a new emphasis on increasing the supply of organs donated by the living. One idea, called kidney paired donation, is being explored in a pilot program that will be launched in September by the United Network for Organ Sharing. Currently, most live donors are relatives or friends of those needing kidneys. Some of those willing to donate to a loved are not good matches because of immune system or blood type incompatibilities. In kidney paired donation, an incompatible donor and recipient (a husband and wife, for example) are brought together with other incompatible pairs and matched up to each other. The process is rather like drawing diagonal lines between celebrities and their matching baby pictures in a magazine quiz. The transplants are performed simultaneously; in part to keep a live donor from backing out once his/her friend or relative has received a kidney.

A further twist on this scheme is the “donor chain;” a group of donors and recipients that includes one or more “altruistic” donors who have chosen to give up a kidney out of the goodness of their hearts. Described in a report in the March issue of the New England Journal of Medicine, these chains can be very elaborate and the transplants sometimes are performed weeks or months apart at multiple sites around the country. In the NEJM case there were 10 people involved and surgery took place at six transplant centers in five states.

The most recent donor chain transplant occurred in July, involving 14 people—seven live donors and seven recipients—at three hospitals in Washington D.C. The donors included relatives and friends of some of the recipients as well as two “altruistic” individuals who had registered independently with a kidney donation site.

The problem is that live donors, especially altruistic ones, are hard to come by. And even if they can be found, the vetting process for potential donors (psychological testing as well as blood work and health history) eliminates many. Larissa MacFarquar writes about these seemingly selfless individuals in her piece for the New Yorker, “The Kindest Cut.” She reports that about 600 altruistic donors have gone through the surgery so far and that almost every day another willing Samaritan signs up at MatchingDonors.com —a website where “people who need a kidney transplant can post a message on the site, describing themselves and their situation in the hope that a stranger will see the posting and be moved to donate.”

Despite this steady increase in live kidney donation, experts agree that there will never be anywhere near enough kidneys to meet demand. The truth is that most of us would be unwilling to give up a kidney to a stranger; at least not without some compensation in return. With this in mind, some transplant advocates are now calling for the government to set up a legitimate market for organs—complete with a uniform compensation rate, possibly paid for by Medicare.

Virginia Postrel, writes a great piece in the Atlantic on the state of the kidney transplant field and various strategies for increasing the supply of organs. Postrel donated a kidney to a friend in 2006 so she has first-hand experience with the subject.. After laying out the short-comings of schemes to increase cadaveric donations, donor chains and kidney paired donation, she makes the case for an above-board market for buying and selling kidneys:

“Just as the National Kidney Registry initially screens non-directed altruistic donors, a central organization could do the same for prospective kidney vendors. Those who qualified would be referred to local transplant centers for full medical and psychological testing, after which they could be matched with the recipients—and possibly chains—for whom they were best suited. Unlike volunteers, vendors would not get to choose their recipients, giving everyone in need of a kidney a fair shot. Payment would come not from individual recipients but, as for the rest of the transplant process, through normal insurance (including Medicare) at standard rates.”

Dr. Arthur Matas, a surgeon and director of the Renal Transplant Program at the University of Minnesota is one of the strongest advocates for an official payment program for organs—which could include health insurance for life, a tax deduction or one-time payment. Mattas and others have calculated that if Medicare paid $25,000 or $50,000 to each living kidney donor, many more people would line up to contribute. And ultimately, paying for kidneys would save billions of dollars for taxpayers. Patients awaiting kidneys must undergo dialysis; at a cost of $100,000 per patient. “Eliminating the waiting list would thus save taxpayers $8 billion, or $4 billion if each living donor received a lump-sum payment of $50,000,” says Postrel.

This argument makes a lot of economic sense. It also seems like a humane choice that would help all those people languishing on waiting lists for kidneys. But there are some serious legal and ethical problems involved. For one, in 1984 Congress passed the National Organ Transplant Act that specifically outlaws the buying and selling of organs.

That said, there are precedents in this country for compensating live donors for body components. People are compensated for donating blood and plasma—sometimes with theatre tickets, gift certificates or even cash. Surrogate mothers are paid an average fee of $15,000 for bearing children for others (not including medical expenses, travel costs and legal fees). And of course, women sell their eggs for between $5,000 and $10,000 a pop.

Although fertility centers like to make it sound like these women are doing it out of the kindness of their hearts to help infertile couples, CNN reports that there has been a recent spike in “donations” that is linked to hard economic times. The egg harvesting process requires weeks of hormone injections, ultrasound scans, blood work and a painful egg recovery procedure.

The reality of the situation is that the black market buying and selling of organs has been going on for years in Iran, India, China, Hong Kong and Pakistan, among other places. The local “vendors” are often coerced into donating their organs—either because they are desperately poor and see donating a kidney as the only way to get money or because they are prisoners and given no choice. In China, many organs are obtained from executed prisoners, for example.

The buyers, by contrast, are most often wealthy individuals (often foreigners) who can afford to pay a premium for an organ. The World Health Organization studied the growing problem of “transplant tourism”
in their 2007 report, and noted that buyers are most likely to come from Australia, Canada, Israel, Japan, Oman, Saudi Arabia or the USA.. The WHO estimates that some 10% of all organ transplants performed worldwide qualify as “transplant tourism.”

Would a legitimate and equitable system for compensating donors work ethically in this country? Opponents have real questions about preying on the poor, desperate and frankly; mentally unstable. There are also concerns that once we start compensating donors, the altruists will be turned off and cease to donate.

Arthur Caplan, professor of bioethics at the University of Pennsylvania, believes that creating a market for live kidney donation violates the underpinnings of medicine. He writes in the Hastings Center Report:

“The core ethical norm of the medical profession is the principle, ‘Do no harm.’ The only way that removing an organ from someone seems morally defensible is if the donor chooses to undergo the harm of surgery solely to help another, and if there is sufficient medical benefit to the recipient.

“The creation of a market puts medicine in the position of removing body parts from people solely to abet those people’s interest in securing compensation.”

For me, the answer is less clear. I think we need to do some more research before starting a pilot program to test the idea of compensating live donors for their kidneys.

No one in this country has undertaken a comprehensive study of live kidney donors and how they feel after they’ve gone through surgery. In fact, there is little follow-up of these individuals at all. That might be a good place to start—with the healthy, live donors currently involved in the chains and pairings that have recently been arranged.

In Pakistan, which until recently was a leading center of unregulated organ sales, Farhat Moazam, a surgeon and bioethicist at Sarhad University of Science and Information Technology in Karachi, interviewed some 34 villagers who had sold a kidney for financial gain—to pay off debts, provide a dowry or afford medical expenses for relatives. Her findings, which were published in the May/June 2009 issue of the Hastings Center Report and are discussed here are troubling:

“In their narratives, the vendors, who were primarily men aged 19 to 40 years, described negative changes in body image, psychosomatic symptoms (such as pain at the incision site 3 years post-transplant), feelings of tiredness and weakness, and sensations of emptiness or numbness on the left side of the body. Dr. Moazam labeled this consistent constellation of symptoms the ‘half-man syndrome.’”

As we confront the overwhelming need for kidneys, it would make sense to proceed with caution. Just because we allow egg donation, surrogate pregnancy and other medical procedures (uterine transplants, for example) that seem ethically fraught, doesn’t mean we should go even further and allow healthy people to sell their organs.
By HealthBeat

[San Diego Union Tribune] Scientists in San Diego and in other parts of California are working on numerous projects related to stem cell research, and some of that research is showing promise, at least in the early stages. At a time when the state’s finances are bordering on distress, this research gives at least some reassurance to voters that the $3 billion investment approved through Proposition 71 in 2004 may someday pay off.

Just last week, a team at the Scripps Research Institute in La Jolla led by assistant professor Kristin Baldwin reported that it had bred live mice from mouse skin cells. Many hope that this line of research will offer an alternative to the controversial use of embryonic stem cells, which requires the destruction of human embryos and which led President George W. Bush to place federal funding restrictions on that kind of research.

In June, in yet another line of stem cell research, scientists at the Salk Institute for Biological Studies announced that they had cured a cell taken from a patient with Fanconi anemia, a disease that can cause bone marrow failure. “We haven’t cured a human being, but we have cured a cell,” Salk professor Juan-Carlos Izpisua Belmonte told this newspaper at the time the research was published in the journal Nature.

Although stem cell research is being done in many nations from Singapore to Britain to Israel, in this country, San Diego has become a center for research thanks greatly to Proposition 71. The San Diego Consortium for Regenerative Medicine, which includes the University of California San Diego, Burnham Institute for Medical Research, Salk and Scripps Research have received tens of millions of dollars in grants to further their efforts in stem cell research. In a recent funding round, consortium institutes received six grants totaling more than $16 million. To continue their work, the Salk scientists conducting the research involving Fanconi anemia received a $6.6 million grant from the California Institute for Regenerative Medicine, established under Proposition 71.

The research at Scripps and other institutions involving the skin cells has drawn considerable attention because of the ethical issues that likely will arise. While both supporters and opponents have welcomed the news from the research, in which skin cells from adult mice were coaxed into the equivalent of embryonic stem cells, there is also an enhanced potential for human cloning, a dangerous and frightening prospect.

The guidelines issued after President Barack Obama rescinded the Bush administration funding restrictions will act to restrain some research that may push the limits, but those guidelines don’t affect researchers outside the United States.

It is important that the politicians and other government officials at the state, federal and international level continue to listen to and work with researchers to strike the proper balance between continued support for the promising lines of research and proper regulations, so that ethical and moral lines cannot be crossed.

[BBC] The 64-year-old man was a neighbor of the first two people to die from the plague in Ziketan in Qinghai Province.

Police have set up checkpoints around Ziketan, as medics are disinfecting the area and killing rats and insects.

Pneumonic plague, which attacks the lungs, can spread from person to person or from animals to people.

A spokeswoman for the World Health Organization, Vivian Tan, earlier said an outbreak such as this was always a concern, but praised the Chinese for reacting quickly and for getting the situation under control.

A BBC correspondent in Beijing, Michael Bristow, says that unlike in the past the authorities are being very open about this outbreak.

Local officials in north-western China have told the BBC that the situation is under control, and that schools and offices are open as usual.

But to prevent the plague spreading, the authorities have sealed off Ziketan.

About 10 other people inside the town have so far contracted the disease, according to state media.

No-one is being allowed leave the area, and the authorities are trying to track down people who had contact with the men who died.

Initial symptoms of pneumonic plague include fever, headache and shortness of breath.

The local health bureau has warned anyone with a cough or fever who has visited the town since mid-July to seek medical treatment.

According to the WHO, pneumonic plague is the most virulent and least common form of plague.

It is caused by the same bacteria that occur in bubonic plague – the Black Death that killed an estimated 25 million people in Europe during the Middle Ages.

But while bubonic plague is usually transmitted by flea bites and can be treated with antibiotics, pneumonic plague is easier to contract and if untreated, has a very high case-fatality ratio.

COOPERSTOWN, N.Y. — Visiting the Cleveland Clinic this week,President Obama held up that well-known hospital as a model for the rest of the country. But for most of the nation’s nearly 6,000hospitals, copying the Cleveland Clinic would be like asking the Durham Bulls, a minor league team, to copy the New York Yankees.

A more accessible example is a hospital that sits a bit more than a home-run blast from the Baseball Hall of Fame here. Called Bassett Healthcare, this modest hospital of 180 beds delivers high-quality care at low costs in the face of federal reimbursement policies that discourage many of its best practices.

Changing those policies is crucial to the success of health care reform, economists say — something Mr. Obama said that he would do. “Our proposals would change incentives so that doctors and nurses finally are free to give patients the best care, not just the most expensive care,” the president said Thursday in Ohio.

But almost nothing in proposed legislation that has so far emerged in Congress would encourage the creation of similar hospitals.

Bassett looks like a small liberal arts college, with ivy-covered fieldstone buildings connected by a warren of passageways. But what really sets it apart is the way the system pays its 260 doctors.

Doctors in the United States are usually paid fees for each service they provide. The more procedures and tests they order, the more money they pocket. There is widespread agreement among health policy analysts that many of these procedures are unnecessary, raising costs in ways that often do nothing to improve patient health.

By contrast, Bassett — like the Cleveland Clinic and a small number of other health systems in this country — pays salaries to all of its doctors. No matter how many tests or procedures are performed, they take home the same amount of money. Medical costs at Bassett are lower than those at 90 percent of the hospitals in New York, while the quality of care ranks among the top 10 percent in the nation, surveys show.

Dr. William F. Streck, the longtime president of Bassett, said the hospital paid salaries that were competitive with the money earned in a fee-for-service setting. Some fee-dependent physicians, though, either by working hard or by providing excessive treatments, can make more, an ability doctors trade associations have long defended.

“Everyone knows that the Bassett model is the right model,” said Senator Charles E. Schumer, a New York Democrat involved in negotiations over health care legislation. “The question is, How do you get from here to there?”

It is a question that has plagued lawmakers and medical experts for nearly a century. As early as 1910, Abraham Flexner wrote a landmark report that argued teaching hospitals should be staffed only with salaried doctors. In 1970, the Carnegie Commission released a report calling for drastic improvements in rural health care, and highlighted Bassett as a model.

Many doctors who work at Bassett believe deeply in its mission. Bassett has opened 13 clinics in schools around the region. The clinics lose money, but Bassett is considering opening 14 more.

“I was in private practice for years in New Mexico,” said Dr. Philip A. Heavner, the chief ofpediatrics at Bassett, “and there was no interest in doing anything like this because people thought it would take volume away from their practices.”

Dr. Randall Zuckerman, an attending surgeon at the Hospital of St. Raphael in New Haven, left Bassett a year ago because his wife wanted their four children to grow up closer to family. Since many of his patients see fee-dependent doctors, Dr. Zuckerman said in an interview, their care is more disjointed than was common at Bassett.

“They get a lot of different consultations, some necessary and some not,” he said. “They are always missing parts of their medical records because the information is coming from multiple private offices.”

Michelle Griffiths, 41, of Edmeston found a lump on her breast six years ago. Duringcancer care at Bassett, Ms. Griffiths’s appointments to see her oncologist and primary care doctor are often scheduled on the same day. One doctor will sometimes accompany her during a procedure performed by another, and each has her complete medical history.

“The communication amongst all of my doctors is impressive,” said Ms. Griffiths, who works as a database administrator for the insurance company New York Central Mutual. “They always call each other or shoot each other e-mails.”

Such coordinated care is a hallmark of integrated health systems with salaried doctors, like Kaiser Permanente, the Mayo Clinic, the Veterans Administration and the Cleveland Clinic. In each system, medical records are electronic, so doctors have quick access to patients’ entire histories, including X-rays and prescriptions. And doctors often treat patients in interdisciplinary teams where coordination is encouraged since no one loses money by passing a patient to a colleague.

But for some, wages are not enough. Dr. J. Turner Stauffer, a gastroenterologist in Thomasville, Ga., left Bassett 10 years ago. He has four children, including two of college age.

“To provide for my family, I felt I needed to be reimbursed on a fee-for-service model,” Dr. Stauffer said. “I make three to four times what I was making there, although I don’t know what my salary at Bassett would be now.”

Dr. Stauffer would not reveal his pay. A recent national survey found that gastroenterologists earned $457,000 on average, with the top 10 percent making $715,600.

For decades, powerful doctors groups like the American Medical Association opposed efforts to change fee-for-service pay systems. And the culture of medicine has been entrepreneurial, with doctors saying they wanted to be their own bosses.

“Medicine is the last cottage industry,” said Dr. Jordan Cohen, president emeritus of the Association of American Medical Colleges.

Even without legislation, much of this is changing. The share of doctors in one- or two-physician practices dropped to 33 percent in 2005, from 41 percent in 1997, according to the Center for Studying Health System Change. Just 10 percent of doctors in their early 40s work in one- or two-doctor practices, compared with 38 percent of those 60 and older.

Whether these trends will encourage the creation of more hospitals like Bassett is uncertain. Legislation pending in the House instructs the government to create pilot programs for “accountable care organizations” like Bassett. But the history of Medicare is full of pilot programs.

Dr. Streck said there was growing recognition that hospitals like Bassett were models. “Does it appear that Congress is going there?” he said. “No.”

Senator Schumer said the Senate Finance Committee was determined to make major changes to the government’s fee-for-service payment system.

“We talk about it all the time,” he said, “but it’s uncharted waters.”

Congress can encourage competition within an increasingly important class of prescription drugs.

[Washington Post] With a name like the Affordable Health Choices Act, you’d think the health-care reform bill that passed the Senate Health, Education, Labor and Pensions Committee this month would have made an effort to provide affordable health choices. But instead, the bill includes a provision that would create a 12-year market exclusivity period for brand-name biologic drugs. This would drive costs to consumers above even current levels, making the title little more than a mockery.

Biologic drugs, medical therapeutics derived through biotechnology techniques, are an important and ever-expanding field of prescription drug innovation. Forty-five billion dollars of U.S. prescription drug sales last year were biologics, and they comprise approximately 25 percent of new drugs. Prices for a single course of a brand-name biologic can soar into the tens of thousands of dollars, and this is not likely to change soon. Big pharmaceutical companies maintain that a lengthy exclusivity period in addition to the patent protection they already receive is necessary to drive continued innovation. But is it?

A Federal Trade Commission report released last month suggested the opposite — that the biotech industry’s patents on its biologic innovations are so strong that no added exclusivity period is necessary. Biologic drugs require a much more complicated manufacturing process than their chemical equivalents, and, thus, a greater research investment. But the flip side is that many stages of the process can be patented — from the drug products themselves to the genes that produce them to the cells in which they are made. This makes entry into the market by follow-on-biologics, or “biosimilars,” more difficult because multiple patents are harder to design around. Unlike the market for more traditional prescription drugs, in which the entrance of a generic competitor cuts sharply into the profits of a brand-name innovator, the imperfect substitution between biologics means that pioneer biologics retain a large market share even when biosimilar drugs are introduced, allowing innovators a lengthy period in which to recoup their investment.

The Obama administration has favored a seven-year exclusivity period, characterized as a “generous compromise.” Any additional protection would be not only unnecessary but harmful. An extended monopoly would delay the entry of biogenerics and drive costs even higher. Especially considering that the government is a major purchaser of biologics — the top six drugs for Medicare Part B expenditures in 2006 and 2007 were all biologics — this failure to open the market will be costly.

There is still time for action. In the House, a pending amendment would offer a similar 12-year exclusion period, but there is an alternative: a bill put forth by Reps. Henry A. Waxman (D-Calif.) and Nathan Deal (R-Ga.) that would limit the exclusion period to five years. If Congress is serious about health-care reform, it must take another look at whether its legislation truly balances incentives for innovation against the need for price competition.

The case stemmed from a patient admitted to Martin Memorial Medical Center, in South Florida. In 2003, the hospital faced a dilemma: For three years, it had been caring for day laborer Luis Jimenez, who’d been hit by a drunk driver and left a paraplegic with brain damage. The hospital had spent $1.5 million treating him. Now it wanted to transfer him to a cheaper, long-term care facility.

Carla Luggiero of the American Hospital Association says hospitals face limited options for patients with no insurance and no legal status.

“We could help find a charity bed, or subsidize them at a nursing home, or send them home to relatives,” Luggiero says. “Or we could keep them indefinitely. And in that case, that patient is utilizing a bed that could be used for someone who has a more acute health care need.”

When no other facility would take Jimenez, Martin Memorial turned to another option. Early one morning, against the wishes of Jimenez’s cousin and legal guardian, the hospital chartered a plane for $30,000 and flew Jimenez to Guatemala. The government there had said it would care for him in a hospital. But he was soon discharged, and now lives with his mother, bed-bound, in a remote mountain-top village.

“He has no medical care there to speak of, and he’s having an increasing number of seizures and increasing in intensity,” says Bill King, the lawyer for Jimenez’s guardian.

Jimenez’s family had sought damages, plus $1 million to cover the lifetime cost of his care in Guatemala. The Florida jury rejected that claim.

Luggiero says the case might make hospitals more comfortable transferring patients to their home countries, something she estimates happens once or twice a month. But others believe the high-profile case will have a different impact.

“What it is mostly likely to do for a lot of hospitals and a lot of patients is have a chilling effect on the front end,” says Larry Gage, who heads the National Association of Public Hospitals and Health Systems.

Gage says publicly funded hospitals — by law — must stabilize someone in crisis. That doesn’t always mean admitting them.

“Hospitals may well try to define in as limited a way as possible their obligations to the patient [who] shows up at the emergency room,” Gage continues. “And I think you’ll see hospitals tightening up on their policies to try to mirror the reality of what they’re going to get paid to do.”

There’s another aspect to the case: A state judge originally approved Jimenez’s repatriation. But an appeals court later overturned that. It said state judges have no power to decide immigration cases. It was too late for Jimenez, but lawyer Bill King hopes that the ruling sends a message to hospitals.

“You can’t just decide to remove a foreign national, an undocumented person, and send them into what we contend, of course, was a medical abyss,” King says. He plans to appeal the jury decision denying damages to Luis Jimenez’s family.

In a statement, Martin Memorial Medical Hospital said the most disappointing part of this case is that the issue of providing health care for undocumented immigrants remains unresolved. Unfortunately, the hospital says, none of the health care overhauls being debated in Congress would address it.

-Jennifer Ludden