HEALTH CARE REPORT: Insurance warnings

The health insurance industry, which initially held its tongue from criticizing President Obama’s push to overhaul the nation’s health care system, is beginning to speak out against the administration’s proposed reforms.

In a letter to four key senators responsible for overseeing health care reform on Capitol Hill, two industry trade groups warned against implementing a proposed government-run health-benefits program — a critical component of the administration’s reform plans.

Such a move would damage the private health insurance sector and “thwart the ability of the health care sector to implement meaningful delivery system reforms,” says the letter by America’s Health Insurance Plans (AHIP) — the nation’s largest health insurance lobby — and the Blue Cross and Blue Shield Association.

The groups added that allowing the government to compete with private insurance companies would “exacerbate the cost-shift from public programs to consumers and employers in the private market, and destabilize the employer-based system.”

The letter was sent to Senate Finance Committee Chairman Max Baucus, Montana Democrat; ranking Republican Charles E. Grassley of Iowa; Senate health committee Chairman Edward M. Kennedy of Massachusetts; and ranking Republican Michael B. Enzi of Wyoming.

Despite the warning, the heads of both trade groups — who have taken part in ongoing health care reform talks on Capitol Hill in recent months — said they will remain at the table.

“The health plan community is united in support of comprehensive health care reform that ensures all Americans have high-quality, affordable health care,” said AHIP President and Chief Executive Karen Ignagni and Blue Cross and Blue Shield Association President and Chief Executive Scott P. Serota, who signed the letter.

Food and drug fight

The Food and Drug Administration has refuted claims by Sen. Charles E. Grassley that the agency’s boss used an internal memo to threaten employees against speaking out about their problems.

“Absolutely not,” said FDA spokeswoman Judy Leon. “In terms of the intent of the acting commissioner’s memo, the intent was simply to provide a reminder that we have a fundamental responsibility to protect information that exists in the category of confidentially, like patient confidentiality.”

FDA Acting Commissioner Frank M. Torti sent a memorandum this month telling employees that federal laws and policies “require that certain information in the agency’s possession be kept confidential.”

“Violation of these provisions can result in disciplinary sanctions and/or individual criminal liability,” Mr. Torti added. “Improper disclosure could also result in FDA being sued for damages.”

Upon learning of the memo, Mr. Grassley, an Iowa Democrat and chairman of the powerful Senate Finance Committee, fired off a letter to Mr. Torti last week warning him not to stifle whistleblowers. Mr. Grassley, a longtime advocate of whistleblowers, said any attempt to silence FDA employees from exposing wrongs within the agency would be illegal and have a “chilling effect” on employees who want to speak up about their problems.

Mr. Grassley said the tone and tenure of the memo go “beyond legitimate privacy concerns and [appear] to run contrary to many statutes protecting executive branch communications with members of Congress.”

The senator added he also was “concerned” about the timing of the March 13 memo in respect to several recent high-profile cases in which FDA employees publicly exposed failures within the agency.

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