| | | | |  | | By Ruth Reader, Daniel Payne and Erin Schumaker | Presented by PBM Accountability Project | | | | | | 
The next administration may be looking for more AI talent to come to the FDA. | Manuel Balce Ceneta/AP | The Food and Drug Administration needs more artificial intelligence talent to regulate the technology, according to Kev Coleman, a research fellow at the Paragon Health Institute, a think tank founded by a former adviser to President-elect Donald Trump. In a new report, Coleman laid out a policy agenda for how AI should be regulated in health care. First, he said, no policy should interfere with “the primacy” of the FDA’s medical software safety-evaluation process. That would help avoid regulatory capture, he noted. Second, new policies should ensure they incentivize companies to fix problems with their technology. Coleman also said policymakers should avoid broad AI legislation because not all AI is the same. For example, generative AI poses different risks and benefits than predictive AI — particularly within health care. And those technologies also pose different risks depending on how they’re used. For example, whether they’re used to take down basic health information or offer up medical advice. To understand those nuances, the FDA needs to hire people who really get AI, he said. He also said that federal health data privacy rules must be updated for the AI era: “The possibility of AI enabling self-service medical care delivery (without a clinician) raises the issue of whether HIPAA’s definition of covered entity needs to be updated,” he wrote. Why it matters: FDA Commissioner Robert Califf has repeatedly said that he doesn’t have the staff or authority to review all health care AI. Congress has prioritized legislation that would support AI innovation but not new rules that would expand the FDA or create new positions. This problem has partly prompted private sector-led groups, like the Coalition for Health AI, to build their own structures to ensure safe health AI products. What else: Because of AI’s nature and ability to change over time, Coleman has suggested a novel regulatory approach for any AI that falls outside the FDA framework. He proposes creating a “temporary regulatory sandbox” or a small test run with heavy oversight. Such a model could allow developers to demonstrate their products, he said, while also giving policymakers insight that could help shape future policy.
| | | | A message from PBM Accountability Project: Pharmacy benefit managers (PBMs) are taking advantage of Medicare and America’s seniors. It's time for Congress to act. Rein in PBMs by requiring them to increase transparency, share discounts with seniors, and delink PBM profits from the cost of medicines in Medicare. Congress must pass S. 2973 and S. 3430 this year. Learn more. | | | | | | | 
Schuylerville, N.Y. | Richard Schumaker | This is where we explore the ideas and innovators shaping health care. Grasshopper, a 50-pound robot adorned with pink skis, a few cameras and a lot of tech, is helping marine biologists restore seagrass habitats on ocean bottoms around the globe, CNN reports. Share any thoughts, news, tips and feedback with Carmen Paun at cpaun@politico.com, Daniel Payne at dpayne@politico.com, Ruth Reader at rreader@politico.com, or Erin Schumaker at eschumaker@politico.com. Send tips securely through SecureDrop, Signal, Telegram or WhatsApp.
| | | | A message from PBM Accountability Project:   | | | | | | | 
Labor costs have been a major concern for health systems in recent years. | Jens Schlueter/Getty Images | Nonprofit hospitals’ financial outlook is improving, according to a ratings adjustment for the sector from Fitch Ratings. Not-for-profit health systems now have a “neutral” outlook, up from a “deteriorating” one. How so? Health systems have seen improvements toward profitability since 2022 and 2023, when margins shrank — and improved margins are expected to continue into 2025. The changes come after years of financial headwinds, many of which intensified during the pandemic. Increased labor expenses and, at times, a less lucrative mix of procedures significantly altered the balance of costs and revenues. But major costs have stabilized, according to the analysis, and demand is on the rise in some areas. Even so: Margins continue to lag behind pre-pandemic trends, and the cost of debt is rising for many health systems, even as operating costs level out and demand increases. Most hospitals’ outlooks have remained stable in recent years, even as the sector shares common challenges and benefits.
| | | | A message from PBM Accountability Project: There’s consensus in Congress – real PBM reform is needed NOW.
Both sides agree we need to: improve transparency, break the link that allows PBMs to tie their profits to the price of the drug, and force PBMs to share discounts with seniors.
Congress: It is time to finish the job and pass bipartisan senate bills 2973 and 3430. America’s seniors are counting on it. Learn more. | | | | | | | 
Sen. Bill Cassidy (R-La.) wants to review research on gender-affirming care. | Francis Chung/POLITICO | Sen. Bill Cassidy, who will chair the committee overseeing the NIH starting next month, wants to review the results of an agency-backed study of the impacts of gender-affirming care on young people. In a letter to outgoing NIH Director Monica Bertagnolli, Cassidy and five other GOP senators asked her to provide researchers’ past annual progress reports on an NIH-backed study on puberty-blocking treatments that’s come under fire from Republicans. At the center of their scrutiny is Dr. Johanna Olson-Kennedy, medical director at the Center for Transyouth Health and Development at Children’s Hospital Los Angeles. In October, she told The New York Times that researchers hadn’t published the study data because they were worried it would be politicized. The study is part of a broader $9.7 million NIH project on the impact of early medical treatment for transgender youth. The unpublished data, according to the Times story, suggests puberty blockers don’t improve mental health for kids with gender dysphoria, a finding that contradicts a previous Dutch study on puberty blockers and well-being that’s informed gender-affirming care practices. “I do not want our work to be weaponized,” Olson-Kennedy told The Times. “It has to be exactly on point, clear and concise. And that takes time.”
| | | | Billions in spending. Critical foreign aid. Immigration reform. The final weeks of 2024 could bring major policy changes. Inside Congress provides daily insights into how Congressional leaders are navigating these high-stakes issues. Subscribe today. | | | | | Why it matters: In the letter, Cassidy put the review within the context of a broader overhaul of the NIH he wants to pursue, which he laid out in a white paper this spring, including more data-sharing and transparency at the agency and increased congressional oversight. “This means sharing all data, even when they do not support the researchers’ original hypothesis,” Cassidy, who was joined by Sens. Tommy Tuberville (R-Ala.), Ted Cruz (R-Texas), James Lankford (R-Okla.), Markwayne Mullin (R-Okla.) and Mike Lee (R-Utah), wrote. State-of-play: With Republicans slated to control Congress and the White House next year, Cassidy and others in his party will have more power to advance their reform proposals. — President-elect Donald Trump’s pick to replace Bertagnolli as NIH director, Stanford Professor Jay Bhattacharya, is also keen on making changes at the agency. — The Senate inquiry follows an investigation that Republicans on the House Oversight and Accountability Health Care and Financial Services Subcommittee launched last month. — The Supreme Court heard oral arguments last week in a case challenging Tennessee’s ban on puberty blockers for minors. What’s next? Cassidy gave Bertagnolli a Dec. 18 deadline to provide the study progress reports.
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