As the industry is aware, HIPAA establishes sweeping new patient information security and privacy rules, which, among many regulations, encourage the development of an electronic data interchange (EDI) and/or healthcare information system (HIS); the security and confidentiality of all identifiable patient information on an EDI or HIS; and the authentication of anyone sending, receiving or viewing those records.

The law also requires uniform standards for electronic transactions by October 2002.

HIPAA covers all healthcare providers — from large delivery networks to clinics and single physician offices — payers, such as insurance companies and health plans, and clearinghouses that perform intermediary services for providers and payers.

The decision by the Bush administration to proceed with HIPAA’s intent followed a 60-day delay during which time the administration gathered more feedback from industry groups and individuals. Some 24,000 written comments were submitted to the U.S. Department of Health and Human Services (HHS).

While the American Hospital Association (AHA of Chicago) and the Blue Cross and Blue Shield Association (Washington, D.C.) have criticized HIPAA as burdensome and unaffordable, the Healthcare Information and Management Systems Society (HIMSS of Chicago) has given HIPAA its blessing.

“[HIPAA] is something the healthcare system can handle in terms of the costs associated with it,” said HIMSS President and CEO H. Stephen Lieber. “If we build a level of confidence of healthcare data, data transmission, privacy and security with the patient, then we have achieved some objectives that are very worthwhile.”

How much it will cost the healthcare industry to comply with HIPAA record privacy and privacy criteria is anyone’s guess at this point. It will depend on a provider’s or insurer’s technological infrastructure and resources. “We are not even wagering a guess,” Lieber added. “You look at the figures that were linked to [the Y2K] effort. We all know that was an opportunity many people took to do a lot of other things that were not necessarily related to becoming Y2K-compliant.”

According to HIMSS’ surveys, approximately 90 percent of U.S. healthcare facilities are engaged in serious efforts to comply with HIPAA rules.

Lieber expects facilities to take “the full two years to get fully compliant and have this thing nailed.”

Where might there be changes in HIPAA guidelines? Lieber said there remains ambiguity in some statutes, such as one provision that requires healthcare institutions to make the necessary, minimum effort to ensure HIPAA compliance.

Will — or should — that level of compliance be identical for the small, rural community hospital as it is for the major, metropolitan academic research center? “These are legalistic terms and, unfortunately, they probably will be debated in court as much as they are anywhere else,” Lieber said.

The number of warning letters to mammography centers began to mushroom in August 1999. Prior to that month, the percentage of mammography-related warning letters compared to the total number of violations was in the single digits. Since August 1999, the monthly percentage consistently has been in the double digits, reaching heights of 43 percent in November 2000 and 42 percent in February of last year.

According to a review by NetCompliance Inc. (Washington, D.C.), nearly 33 percent of all FDA warning letters (82 of 251) issued in the first three months of this year involved breaches of mammography standards. NetCompliance is an Internet service that provides FDA, Occupational Safety and Health Administration (OSHA) and Environmental Protection Agency (EPA) compliance solutions and workplace safety training.

The FDA’s Web site shows that in the first three months of 2000, 35 percent of all warning letters (100 of 281) were sent to mammography centers.

The MQSA regulates equipment performance, quality assurance records and tests, medical audit and outcomes analysis records, medical records, and personnel qualification (mammograms, unlike other X-rays, must be performed by technologists with specific training and experience). More stringent requirements are scheduled to start in October 2002.

John McCrohan, director of the FDA’s Center for Devices and Radiological Health (CDRH), told Medical Imaging in April 1999 that MQSA was “a set of requirements we expect most relatively modern units to be able to meet.”

Since that statement, some 600 FDA-registered facilities have stopped offering mammography. Clearly, something is amiss. But what?

“A significant portion of the increase in Level 1 findings is associated with things like the processor QC [quality control],” McCrohan said recently.

Michael Volpe, vice president of communications for NetCompliance, offers a second opinion. “The majority [of practitioners cited] have problems with paperwork requirements,” he added.

A look at MQSA warning letters posted on the FDA’s Web site, however, indicates that recipients may be more than just paperwork-challenged. A sampling from March mammography warning letters includes violations, such as mammograms performed by an unlicensed doctor (St. Louis); an uninspected X-ray unit (Bronx, N.Y.); routine failure to notify patients who need biopsies (Columbia, Tenn.); ignoring consumer complaints and quality control procedures (Champlin, Minn.), and mammograms developed with a malfunctioning processor by an unqualified radiology technologist (Coral Gables, Fla.).

Joel Kimelman, M.D., supervisory radiologist of the Oakland Imaging Diagnostic Center (Madison Heights, Mich.), received an FDA warning letter in March for improperly calibrated mammography equipment.

“We did take corrective action. The films are sharper [now],” said Kimelman. “In the end, we’re better off for it.”

As McCrohan explains, there was what he described as “a demonstrated problem” in the mammography field when MQSA was enacted. It was also a time, he noted, “when women’s health issues were very important, and they had somewhat more political leverage.”

Similar programs for other medical imaging modalities, he said, haven’t “gotten much traction politically.”

The April warning was a follow-up to a preliminary report citing irregularities found by the FDA last December at the Buc Cedex, France, facility that manufactures the Senographe. GE’s first-round replies to the FDA were written in French. It was unclear whether some of the irregularities had been addressed, and the April 10 warning was subsequently issued. It granted GE 15 days to correct all the problems.

“We responded within the time the FDA asked us to have a response,” GE Media Relations Manager Patrick Jarvis added. “We did address the issues point-by-point that were raised by the FDA. As of this time, we don’t anticipate any further action.”

According to the FDA letter, GE disregarded numerous section 501(h) quality system regulations for medical devices. The FDA charged GE with, among other things, failure to establish procedures for design changes and user/patient conflict resolution, forgoing final product inspection prior to shipment, not ensuring adequate packaging strength, and neglecting to report field complaints and corrective actions to the FDA.

“We are taking this very seriously,” Jarvis said. “The items the FDA listed we believe are procedural in nature — procedures that are in place at that particular facility.”

He added that the FDA letter prompted no need to make changes in how the Buc facility manufactures the Senographe 2000D.

GE has an installed base of approximately 175 Senographe 2000D units worldwide.

Keynote speaker Manuel J. Glynias, president and CEO of NetGenics (Cleveland), opened the first full day’s schedule with “The Source Code of Life,” offering his insights on the Human Genome Project and how information technology helps with the understanding of human diseases.

The federally funded project has been aided by the private sector, in particular Celera Genomics Group (Rockville, Md.), a business unit of Applera Corp. (Norwalk, Conn.).

Genome sequencing began in 1995 and by the end of 1999, sequencing on the smallest of chromosomes was completed. In late April, Celera completed the assembly of the mouse genome.

While Glynias noted that Celera and the public group took two different strategies to accomplish the project’s goals, many fascinating findings were uncovered along the way. Among the discoveries is that males have twice the mutation rate as females and that 50 percent of the human genome is repeat sequences.

“Humans are remarkably similar, compared to other species,” Glynias said. “Human are 99.9 percent identical. It is the 0.1 percent that makes us different.”

As for the project future ramifications, Glynias sees the emergence of pharmacogenomics, whereby pharmaceutical companies can develop personalized medications to treat people with certain diseases with drugs that take into account the person’s genomics.

Margie Keyes, health scientist administrator for the Agency for Healthcare Research and Quality (AHRQ of Rockville), was HealthTech 2001’s other keynoter. Patient safety was a timely topic, as the AHRQ is one of several agencies charged by Health and Human Services Secretary Tommy G. Thompson to improve existing systems to collect data on patient safety.

The task force is a result of the Institute of Medicine’s 1999 report, “To Err Is Human: Building a Safer Health Care System.”

Quoting statistics from the document, Keyes noted that 44,000 to 98,000 Americans die each year from incidents related to patient safety in healthcare facilities. It is the eighth-leading cause of death in the U.S. It also costs approximately $29 billion for these mistakes, the majority of which are systemic issues, rather than the fault of the practitioners.

The Institute recommends the use of technology to improve patient safety and to have a backup system in place in case the primary system fails. As other high-risk industries have used automation to improve employee safety, Keyes said healthcare would be wise to take the same tack, using computerized patient records, for example, to reduce or eliminate systemic and human error.

Healthcare systems also should anticipate problems and then make it impossible to do things wrong. Expect failure and establish a recovery system to counteract it.

The organizations issued a joint statement saying that together the two advocacy groups would “better represent and serve individuals and companies involved in the healthcare information technology marketplace.”

“One is the area of professional issues and public policy,” noted HIMSS President and CEO H. Stephen Lieber. “You have a much stronger, effective voice by putting the provider community, the end-users, together with the manufacturers and suppliers when you are talking about healthcare policy issues in the information technology and management area. The second point [concerns] the impact on the industry itself. By putting the user together with the vendor, you have a much more efficient way of influencing the direction of technological development.”

CHIM in December 1986 began within the structure of HIMSS, which then operated within the American Hospital Association (AHA of Chicago). In 1989, the two organizations became independent, but maintained a collaborative relationship through operating agreements.

HIMSS represents individual members, while CHIM is a vendor-member organization, which was formed to support and promote the annual HIMSS conference and trade show, functioning as a liaison between HIMSS and vendors.

The boards of both organizations will meet to review a variety of documents, such as new bylaws governing a united organization. Lieber said the HIMSS board approved the reunification in late May and that the membership is expected to follow suit. CHIM President Carla Smith added that her organization likely will support the plan.

HIMSS’ membership vote is scheduled to occur in mid-July, with the transitional process beginning on Aug. 1. The effective legal date of the reunification has been set for Jan. 1, 2002.

“That [date] is a function of a couple of things, including giving us some time to go through, in a very measured way, transitional steps without having just thrown the two organizations together to sink or swim,” Lieber said. “The primary [reason] is we want some time for the boards to come together to work through some strategic thinking and planning, direction setting, for the organization. We have to get the staff cultures together, work through a lot of those sorts of things, and that is our plan from the first of August through the end of December.”

Lieber remarked that the board, which convenes in January, will consist of some 20 board members from both organizations. Over the next three years, board membership will shrink to 12 — the size of the original HIMSS board.

HIMSS has an annual operating budget of $13 million, a staff of 45 and a membership of approximately 12,000. CHIM’s annual operations total just less than $1 million, it employs five people and has approximately 125 vendor members.

Market research firm Frost & Sullivan (San Jose, Calif.) draws those conclusions in a recently released report. The study uses 1999 worldwide revenues of $2.95 billion, representing a 10 percent growth rate, as the base for all estimates.

The report cites new clinical applications, which industry analyst Hamsini Muralidharan suggests will be in areas such as peripheral vascular and ophthalmology.

“It is basically for confirmation, because ultrasound is not as expensive as MRI or CT. It is far, far cheaper,” she said. “It is totally safe; it produces no harmful effects on humans. So when you have these two advantages working for you, no one would hesitate to use ultrasound to confirm a diagnosis.”

Ultrasound’s biggest impact over the years has been in general radiology, cardiology and obstetrics and gynecology.

The radiology segment generated revenues of $1.21 billion in 1999, representing a growth rate of 9 percent. That growth came from improvements in image quality and is expected to continue with further development in harmonic imaging, 3D imaging and contrast agents.

The diagnostic echocardiography equipment market realized revenues of $859.2 million, a growth rate of 9 percent. While developments in Doppler echocardiography, color Doppler, stress Doppler echocardiography and transesophageal echocardiography (TEE) were instrumental, growth is seen primarily as a response to the rise in cardiovascular disease worldwide.

World revenues for obstetrics and gynecology reached $457.5 million in 1999, a growth rate of 12 percent. High birth rate countries in the developing areas of the Asia-Pacific, Africa and South America, coupled with less expensive, portable equipment, are expected to provide this segment with its biggest gains.

On the topic of vendors, the Frost & Sullivan report gives GE Medical Systems (GEMS of Waukesha, Wis.) the No. 1 worldwide nod in sales, as well as distribution networks and customer service support. Toshiba Corp. (Tochigi, Japan) ranks second, due to the fact that it is the top seller in its own domestic market with strong sales in the United States and in Europe as well.

The company in May completed its purchase of 14 fixed-site nuclear cardiology imaging centers from Nuclear Imaging Systems (NIS) and Cardiovascular Concepts PC. The facilities are located in Pennsylvania, New Jersey, Delaware and Maryland. NIS and Cardiovascular Concepts filed for bankruptcy under chapter 11 in August 2000.

INA intends to continue operating the existing cardiac imaging sites and will incorporate the centers into its group of companies in the Northeast United States.

“We think this is a company with great potential, and we plan to grow and expand it,” said Integral President and CEO Ronald Lissak.

The imaging centers provide a range of nuclear cardiology services, including cardiac stress tests, SPECT, perfusion and wall motion studies. INA will be headquartered in Malvern, Pa. Sandra Atkinson has been named general manager of the new company.

Atkinson noted that a major goal of INA during the transition period is to assure physicians who send their patients for medical studies that they will continue to receive the service.

“Physicians and patients should experience a seamless transition,” she said. “In addition, Integral will be investing in new equipment and infrastructure to further improve service.”

Integral PET Associates LLC (New York City) and its affiliates currently own fixed-site PET centers in New York, New Jersey and Pennsylvania, and in April announced a program with the University of Pennsylvania Cancer Network (UPCN) to develop a network of PET scanners at community hospitals that are members of UPCN. Integral PET is the largest owner of fixed-site PET centers in the country.

The technology venture capital investor on April 5 announced its intention to acquire Premier PET Imaging International Inc. and Premier Cyclotron International Corp. (PCI).

Premier and PCI — which are not yet operational — were formed to own and operate positron emission tomography (PET) imaging centers and cyclotrons, the machines that manufacture radioisotopes used in PET imaging.

Under the proposal, Sagemark would purchase all outstanding shares of the capital stock of Premier and PCI in exchange for shares of Sagemark common stock. On the closing date under the stock purchase agreement, Sagemark will issue 6,000 shares of its common stock to the stockholders of Premier and PCI. Sagemark also has agreed to provide $1 million of working capital to Premier to establish and operate its PET centers.

Stephen A. Schulman, M.D., current chairman and CEO of Premier and PCI, will continue in those positions.

While the technology itself isn’t new, PET imaging as a market is growing because of Health Care Finance Administration (HCFA) decisions over the last two years to reimburse for a variety of PET procedures. Sagemark also could realize revenue from supplying chemicals to other PET centers, since few own their own cyclotrons.

HCFA in December 2000 expanded Medicare reimbursement for PET scans for older Americans in six cancers — lung, colorectal, lymphoma, melanoma, head and neck and esophageal. In each of these cases, PET will be reimbursed from diagnosis and staging to assessment of therapy and the recurrence of disease.

Sagemark previously owned many types of businesses throughout the United States. In 1997, the company reformed as a financial services company, primarily funding Internet and telecommunications start-ups. In 1999, Sagemark posted a net income of $9.9 million.

“We anticipate that most of these sites will have either fixed or mobile PET scanning capabilities. That’s our goal,” said Lissak. “Some will not have the volume to be fixed [sites]. Some will end up in a mobile environment, but we hope that within the next two years that all [28] places will be up and running.”

Lissak indicated that it will cost Integral approximately $1.7 million for each fixed-PET site, including construction and associated costs. The sites will utilize existing hospital rooms and not require new construction, he added.

Abass Alavi, M.D., UPenn’s chief of nuclear medicine and PET researcher and clinician, will lead the PENN PET center physician team. Currently, he performs eight to 10 PET studies a day, he said. At the same time, however, he said his concern that PET studies be done correctly looms large in his wanting to spearhead the project.

“As a person who has been involved in this [PET] process from the beginning, my heart goes to my patients who really are going to benefit from these tests being done properly. I am extremely nervous about the misuse of PET,” Alavi said. “That is my motivation: to make sure that this is not misused.”

Alavi recommends at least six months of full-time training in reading PET scans done with fluorodeoxyglucose (FDG). There also is a growing need for chemists, physicists and other healthcare professionals knowledgeable about cyclotrons and other issues associated with PET imaging, he noted.

“It is the first [opportunity] of its kind that takes a cancer network that is going to give the expanded care that is needed,” Lissak stated. “When it is in your own community, you utilize the service more, you become more familiar with it, you understand the benefits of it.”

In May, the company purchased 14 fixed-site nuclear cardiology imaging centers located in Delaware, Maryland, New Jersey and Pennsylvania from Nuclear Imaging Systems (NIS) and Cardiovascular Concepts PC.

Lynne Ruess, M.D., of Tripler Army Medical Center (Honolulu), found that filmless radiology work may in fact cause repetitive motion injuries.

Ruess presented her findings in May at the 101st annual meeting of the American Roentgen Ray Society (ARRS of Leesburg, Va.) in Seattle.

Ruess described how four of Tripler’s 12 radiologists experienced hand and arm pain that was diagnosed as carpal tunnel and cubital tunnel syndromes. Tripler’s radiology department is almost entirely digital. The injuries were determined to have been caused by bad ergonomics combined with lots of computer keyboarding, PACS time and ultrasound scanning, as well as plenty of elbow-flexing “every time we pick up a dictaphone to our ear,” she added.

The injured radiologists now use voice-activated software to reduce their typing. The ergonomics solution, however, isn’t as simple. Tripler’s workstations were evaluated by an industrial hygienist, who flunked them all.

“Nothing meets current recommendations,” Ruess said. “We have really crummy chairs.”

The workstations now are being restructured.

In other ARRS presentations, Nathalie Duchesne, M.D., unveiled results from a recent study of the new ultrasound-guided version of Mammotome Hand Held, the biopsy device manufactured by Ethicon Endo-Surgery Inc. (Cincinnati). The study was conducted among 61 patients at the Hospital du Saint Sacrement (Quebec).

Fifty-five percent of the patients had lesions completely removed using the Mammotome technique, which is designed for more accurate diagnosis than other methods. Mammotome uses a vacuum that is quieter than core needles — a bonus for half the patients studied. The rest found the spring-loaded core devices nerve-wracking. Researchers predict Mammotome could eventually be applicable in most breast biopsies.

In defense of core needle biopsy, ARRS keynote speaker Carol Lee, M.D., claimed MR screening and MR-guided biopsy are really the big news in breast cancer treatment. MRI is proving especially useful in screening women with mutations of the BRCA-1 and BRCA-2 genes, who are at high risk of developing breast cancer.

MRI may, in fact, be better than mammography for such screening, opined Lee. The key to success is accurate core needle biopsy of abnormalities. Equipment currently is under development to fill that need, and tests are being conducted in Europe. In the meantime, MRI breast screening in the U.S. is used primarily to evaluate silicone implants.

One paper from Eric Rubin, M.D., of Thomas Jefferson University Hospital (Philadelphia), revealed that radiologists — rather than cardiologists — are the main practitioners of nonsurgical procedures to treat vascular disease.

Compiled and analyzed by Health Care Markets Inc. (Hilton Head, S.C.), the stock indices above plot the performance of two market segments: Imaging Devices and Imaging Services. The indices are part of WDI’s healthcare database of more than 1,000 companies. For comparison we also plot the progress of the S&P 500. The indices began in January 1991 with a base of 100.

Inphact also named Cam Caudle and Rick Davis as directors of business development. Caudle previously served as a sales representative for GE Medical Systems (Waukesha, Wis.) and Ortho-McNeil Pharmaceutical (Raritan, N.J.), while Davis handled new business development and strategic planning for ProClaim Asset Management Services (Franklin, Tenn.). In addition, Richard Hummel has become director of technology accounts after serving as department head of radiology at St. Tammany Parish Hospital (Covington, La.).

Positron Corp. (Houston) has promoted Wayne Webster as vice president of sales, marketing and service. Webster joined Positron in March 2000 as Eastern regional sales manager. His career includes a stint as president and CEO of PracSys Corp., a Massachusetts venture capital funding start-up for the development of particle accelerators for medical and industrial uses.

Marconi Medical Systems Inc. (Highland Heights, Ohio) has promoted Rob A. Spademan to vice president of marketing programs, responsible for all product marketing efforts, corporate communications and public relations. Spademan joined Marconi in 1989, serving in several capacities including director of global communications.

Toshiba America Medical Systems (TAMS of Tusatin. Calif.) has named Dennis Constantinou as senior director of product marketing. Constantinou joins TAMS following seven years at Imagyn Medical Technologies Inc. (Newport Beach, Calif.) where he served as director of marketing.