Deal with quakes first.
That’s the retort of some hospital executives to Gov. Arnold Schwarzenegger’s proposed healthcare coverage plan.
Hospitals are in the throes of upgrading and expanding their facilities as a result of a law passed nearly 13 years ago. California’s earthquake law requires major hospitals to be able to withstand a major quake by 2013. By 2030, they need to be able to keep operating after one.
The law came after the Northridge earthquake damaged several Southern California hospitals.
A recent study estimates compliance costs for California hospitals now stands at $110 billion, said Maureen Zehntner, interim chief executive of UCI Medical Center, which is spending more than $370 million to build a hospital tower.
“Everyone supports having hospitals that will withstand a major earthquake,” Zehntner said. “What is needed is some combination of using updated technologies to more accurately assess a hospital’s seismic vulnerability, reasonable extensions of compliance deadlines and viable strategies to assist with the necessary capital financing.”
Schwarzenegger’s proposal to spend $12 billion a year to extend healthcare coverage to nearly all California residents would impact hospitals. If the plan becomes law, businesses would be required to provide coverage or pay 4% of their payroll into a state fund. Hospitals and other healthcare providers could end up being taxed.
The earthquake law is “separately complex,” said Peter Bastone, chief executive of Mission Hospital in Mission Viejo.
The law “is an unfunded mandate by the state and literally takes away resources from direct patient care and forces hospitals to make service and program decisions based on seismic exposure rather than that of disease management within a community,” he said.
Bastone said he would like to see funding through what he called “a dynamic and affordable loan program.”
He pointed to the federal Hill-Burton Act, also known as the Hospital Survey and Construction Act of 1946. It was designed to provide federal grants and guaranteed loans to improve hospitals. The law later was amended and became part of the federal Public Health Security Act in the 1970s.
Loans “would alleviate this gross unfunded mandate that has put the whole hospital delivery system in California at risk,” Bastone said.
Bastone’s tough talk comes even though Mission has relatively little exposure to earthquake risks because most of its buildings were built to current standards roughly a decade ago.
Allergan’s Botox Blitz
In the 2004 holiday comedy “Christmas with the Kranks,” Tim Allen’s character gets Botox injections that freeze his face and make eating a fruit salad one of the funnier scenes.
The folks at Allergan Inc. weren’t laughing.
The Irvine drug maker is taking aim at the stereotypes of its wrinkle remover Botox. Starting this month, Allergan is running TV and print ads dubbed “Freedom of Expression.” The campaign’s out to dispel the notion that Botox, which is injected into the forehead and upper parts of the face, freezes the face and prevents you from making expressions.
Botox is made from a purified form of botulinum toxin and works by blocking nerve impulse transmission to facial muscles to reduce frowning and smooth out wrinkles.
Some media strategists warn Allergan has to tread cautiously with its campaign, amid worries about misleading consumer advertising by drug makers.
Botox’s cousin,Juv & #233;derm, Allergan’s wrinkle smoother for the lower part of the face,faces the prospect of more competition.
Right now, Allergan’s Juv & #233;derm faces off with Restylane from Medicis Pharmaceutical Corp. of Scottsdale.
Now Artes Medical Inc., a newly public company out of San Diego, is asking regulators to approve ArteFill, its treatment for lower-face wrinkles. The kicker: ArteFill could work for five years. It’s now approved for six-month use, the same as Juv & #233;derm and Restylane.
Allergan and Medicis are the dominant companies in the dermal filler market, which is pegged at $250 million in the U.S. and $500 million worldwide annually. Allergan got Juv & #233;derm as part of its $3.2 billion buy of Inamed Corp. last year, in which it won out over Medicis.
Allergan is marketing Juv & #233;derm and Botox to doctors as a tandem treatment.
Artes plans to submit clinical trial data to the Food and Drug Administration next month in a bid to get five-year approval, according to news reports.
ArteFill could end up being a threat to Juv & #233;derm and Restylane, said Jose Haresco, an analyst for Merriman Curhan Ford & Co., in a CNNMoney.com article. ArteFill, Haresco said, is “for that subset of the population that doesn’t want to get injected in the face every few months. (ArteFill) is really the cheaper way to go. Medicis and Allergan are a little bit afraid of it, and they have a right to be.”
Analyst Aaron Gal of Sanford C. Bernstein & Co. is a bit skeptical:
“Most of the dermatologists want something that lasts longer than six months, but not something that lasts five years,” Gal told CNNMoney.com. “The sweet spot seems to be one or two years. The problem with fillers that last longer is that our faces change over time.”
