The ACP Advocate Blog

by Bob Doherty

Friday, October 30, 2009

Who wins from the House reform bill? Follow the money and find out.

Estimates by the Congressional Budget Office of how legislation affects the federal budget can tell a lot about Congress' priorities. Provisions in bills relating to specific health care sectors (e.g. physicians, hospitals, drug manufacturers, insurers) that the CBO scores as producing "savings" means that that particular sector is going to be hit with payment reductions or tax increases to fund other priorities in the bill. Provisions scored by the CBO as adding to federal budget expenditures means that the bill's sponsors have decided that the affected sector is a priority deserving of more federal dollars.

What does the CBO's preliminary estimate of the new House health reform bill tell us about Congress' priorities? That primary care and prevention are the sectors that Congress has identified as deserving as more federal spending, above all others, and that insurance companies in the Medicare Advantage program is the sector that will take the biggest hit. Other sectors facing steep reductions are hospitals (reduction in their market basket increase and disproportionate share payments), drug companies and home health agencies.

In fact, primary care physicians get the single largest bump in spending of any sector in the entire bill. Here is how:
$ 57 billion more will be spent over the next 10 years to increase Medicaid payments to primary care physicians so that they equal the Medicare rates. This is more than any other sector of providers, suppliers and health professionals will get, bar none.
$ 4.7 billion more will be spent to increase Medicare payments to primary care physicians for office, hospital, nursing home, home and emergency room visits.
$ 2.3 billion more will be spent to fund two Medicare and Medicaid pilots to reimburse primary care physicians for care coordination in a Patient-Centered Medical Home.
$ 1.5 billion more will be spent on Medicare GME, much of it directed at increasing primary care training.

Prevention and wellness programs will also get tens of billions in additional federal spending. The bill creates a $34 billion trust to fund public health investments in wellness and prevention, and another $10.7 billion to fund coverage of preventive services under Medicaid.

Now, I know that many of the regular commentators for this blog will respond with a shrug to the increased spending on primary and preventive care, because they will say that it is not enough to prevent a catastrophic shortage of primary care physicians. And they will have a point: I don't think the policies in this bill, by themselves, will suddenly result in thousands of more medical students choosing primary care, or necessarily persuade those in practice that there is a brighter future ahead, but I do believe that they begin to put in place programs that will help. Still, it is undeniable that the Congress has decided that primary care and prevention are priorities that deserve a lot more money: the combined $100 billion that the House proposes to spend directly on primary care, prevention and wellness over the next decade represents more than 10% of the bill's total net cost of $894 billion. The fact that primary care is now viewed as a top priority also is evidenced by introduction today of a bill, supported by the House leadership, that would repeal the Medicare sustainable growth rate and replace it with a new update system that will allow payments for primary care and preventive services to grow at a faster rate than all other services.

By any standard, a combined expenditure of almost $100 billion on primary care, prevention and wellness represents a huge shift in the priorities of the federal government, and one that I think deserves our recognition and support.

Today's question: What do you think the increased spending on primary care and prevention could mean to internists and their patients?

Thursday, October 29, 2009

Revised House bill would expand Medicaid, offer public option, cover 96%, and lower the deficit

Today, Speaker of the House Nancy Pelosi (D-CA) released a new version of the health care reform legislation that is derived from an earlier bill (H.R. 3200) approved by the House's three health committees. I am still making my way through the bill, so will have more to say about it in future posts. As reported in The Washington Post, the bill is likely to attract broad support among Democrats but no Republican votes.

The biggest difference with H.R. 3200 is that the bill expands Medicaid to all persons up to 150 percent of the federal poverty level, instead of 133% in the earlier bill. Medicaid, once the poor sister of the popular Medicare program, would now be the single largest source of health insurance in the United States. To increase physician participation in Medicaid, the bill would increase Medicaid payments to primary care physicians over several years until they at least equal Medicare pay rates in all states.

It is also substantially less expensive than H.R. 3200, with an estimated cost of less than $900 billion over 10 years, according to the CBO, and would reduce the deficit by $104 billion over the same ten years. One reason that the cost has gone down is that it is cheaper to enroll people in Medicaid than to offer them subsidies to buy private health insurance coverage. It also removes the cost of repealing the Medicare SGR physician pay formula from the legislation; instead, the House leadership has introduced a separate bill that would repeal the SGR and create two separate spending targets, a higher one for evaluation and management and preventives services, and a lower one for all other services, although both categories would be allowed to grow faster than under the current SGR. How the House plans to move the SGR bill outside of health reform legislation remains to be seen.

The bill includes a permanent 5% Medicare bonus for office and hospital visits provided by primary care physicians, 10% in health professional shortage areas. There would be a modest expansion of graduate medical education (GME) training positions for primary care, and new and expanded loan repayment for primary care clinicians who satisfy a service obligation.

And, on the public plan, the new bill would offer individuals who qualify for subsidized coverage the ability to enroll in a government-administered plan that would negotiate its payment rates with physicians and hospitals instead of using the Medicare rates.

Today's question: What is your initial reaction to the new health reform bill?

Wednesday, October 28, 2009

The Public Plan Rorschach Test

The idea of offering people the option of enrolling in a public plan, similar to Medicare, has become the Rorschach test for health reform. Many conservatives see it as a foot-in-the-door that will lead to government-run, socialized medicine. Many liberals see it the same way, as the first step to achieving a single payer system, although fewer will admit to it.

If you distrust and dislike insurance companies, you like the public plan. If you distrust and dislike government, you despise it.

Then there are the deal-makers, the people in Congress who have to find a way to bridge these differences so that they can get a majority in the House and a 60 vote super-majority in the Senate. For them, the policy is less important than the votes they need to pass a bill. They are the ones who dream up things like "triggers", so the public plan would only go into effect if private insurers don't cover enough people and keep costs under control, or state opt-out or opt-ins, so each state could decide whether or not to participate. The deal-makers also have to decide if they will get more votes by having a "robust" public option (meaning that it would pay doctors or hospitals based on the Medicare rates), as the liberals insist, or whether it would use negotiated rates, as many of the "centrists" prefer.

The Hill newspaper is reporting that Speaker Nancy Pelosi (D-CA) will be unveiling an agreement tomorrow to have a public plan option that would use negotiated rates instead of Medicare. Last week Senator Majority Leader Harry Reid (D-NV) announced that the Senate bill will have a public plan with a state opt-out.

But one way or another, the public plan has come back from the dead, as captured in this Halloween illustration brought to us by The Washington Post cartoonist Tom Toles.

The scary thing about the public plan though, may be what it doesn't do, as Fred Hiatt, writes in The Washington Post. He argues that the public plan allows the politicians to pretend they are controlling health care costs while for the most part ducking the issue. Robert Samuelson, also writing for The Post, makes a similar argument, that the debate of the public plan allows Congress to "fake it" when it comes to controlling costs.

I see the public plan in the similar fashion as they do. Although the public plan has become the defining issue for many, I think there is a lot less to it than meets the eye. Depending on how it is structured, it could do some good in introducing some needed competition to the insurance industry, but I hardly believe that its inclusion or not is going to make or break health care reform. Especially since the deal-makers likely will water it down so much it won't have that much negotiating clout in the market.

Today's question: How important do you believe the public option is to health care reform?

Thursday, October 22, 2009

Coming soon! Medicare Part E!

The Hill reports that the House Democratic leadership has decided to rebrand the "public option" as Medicare Part E, that is, Medicare for everyone. But are they really proposing that everyone should be able to enroll in Medicare, fulfilling the wildest hopes of single payer advocates?

Not likely. The House's version of Medicare Part E could more aptly be labeled as the Medicare Part UPWDNHATAEHCAWDNQFMOS program , standing for Uninsured Persons Who Do Not Have Access To Affordable Employer Based Health Coverage And Who Do Not Qualify For Medicaid Or SCHIP. Barring a complete re-write of the House bill, the re-branded public plan option would be available only to the 30 million or so people who fall in the UPWDNHATAEHCAWDNQFMOS category and are eligible to receive federal subsidies to buy coverage through a health alliance. Calling it Medicare for Everyone doesn't make it so.

Still, it might be a very good political move. People like Medicare and don't associate it with "government run" health care (remember the reports of seniors at the August town hall meetings screaming "keep government out of my Medicare?").

The Hill also reports that the plan will be "the 'robust' option or 'Medicare Plus 5' in the jargon that has emerged on Capitol Hill, [which] ties provider reimbursement rates to Medicare, adding 5 percent."

The American College of Physicians has said that it could be appropriate for people eligible for the health exchanges to have the option of choosing either a qualified private insurance plan or a public health plan, provided that the public option is funded through premiums and is not tied to Medicare physician participation agreements or Medicare rates. ACP wrote:

"Proposals to use the current Medicare reimbursement structure as a basis for reimbursement under the public plan option raise significant concerns. In particular, payment levels for physicians participating in the public plan would amount to price controls that insufficiently compensate physicians for their work. It is widely believed that the current Medicare fee schedule is ineffective in promoting quality care and incentivizes volume-based rather than value based health care. In its March 2009 report to Congress, MedPAC stated that it was dissatisfied with the current fee schedule updating mechanism for physician payments. Further, the Medicare fee schedule has resulted in improper utilization of services rather than cost containment. Proponents of the public plan option have cautioned that hospital closures, stifled innovation of new technology, and limited access to physician services could result if a government-run health plan strictly limits payments to providers under a public plan ... To be successful, a public health plan would not have to control prices to maintain access, promote quality care, and limit cost efficiencies ... Instead, the government (or the plan's administrator) should negotiate with providers in a manner similar to the private market."

Especially given the Senate's failure yesterday to repeal the Medicare Sustainable Growth Rate (SGR) formula, it doesn't make sense to build the new Medicare E program on a payment structure that Congress itself knows doesn't work and would require that they close a $240 billion budget shortfall to stop the scheduled physician pay cuts. The same payment structure that Congress acknowledges undervalues primary care and rewards volume over value. Yet Speaker Pelosi wants the flawed Medicare fee schedule to be the foundation for the new public option?

My guess is that the decision to base the public plan on the Medicare rates is principally a negotiating tactic in anticipation of a conference committee with the Senate, which is not likely to include a "robust" public option in its bill. A compromise might be to accept the House's proposal for public plan option, but to divorce it from the Medicare rates and instead allow the public plan to negotiate rates with physicians, hospitals and other providers. Yet in one form or another, it seems more likely than ever that some kind of public option will end up in the final bill. Call it Medicare E if you want, even though most of us will not have access to it.

Today's questions: What do you think about re-branding the public option as Medicare Part E? Should it pay physicians and hospitals based on the Medicare rates (plus 5%) or should the rates be negotiated?

Wednesday, October 21, 2009

Congress again fails to end the SGR lunacy

Just a few days ago, it looked like Congress might actually do the right thing and end the annual cycle of enacting short-term measures to stop Medicare payment cuts caused by the Sustainable Growth Rate (SGR) formula, only making the problem harder and more expensive to fix the next time around.

But today by a 47-53 vote, the Senate - including 13 Democrats - voted against a motion to end a filibuster against S. 1776, the Physician Payment Fairness Act of 2009, even though the bill had the support of the White House, Senator Finance Committee Chair Max Baucus (D-MT), and Senator Chris Dodd (D-CT), acting chair of the Senate HELP committee during the (late) Senator Ted Kennedy's illness. S. 1776 would have repealed the SGR and eliminated all of the accumulated cuts caused by the formula.

S. 1776 failed despite a huge grass roots push by the ACP, American Medical Association, and other physician organizations, and despite the fact that AARP, the voice of America's seniors, supported the bill.

The bill was victim to the dysfunctional political environment today that makes consensus so difficult. Many Republicans viewed the bill largely as a Democratic effort to "buy" physicians support for health care reform (a cynical and unsupported allegation - more on this later) and they wanted to deny the Democrats a victory on anything having to do with health care reform. They also wanted the cost of the SGR repeal to be counted against the cost of the health reform bill, so that the bill would be seen as blowing a hole in the deficit. (Never mind that the SGR, which has led to all of the accumulated cuts and costs we are now facing today, was created by the Congress in 1997, when the GOP was in control, and that past Congresses, Republican and Democratic alike, have failed to take the steps needed to fix it. The SGR problem and its cost would be with us today, even if there was no health reform bill.)

It also seems many Democrats have had the equivalent of a death-bed conversion to fiscal responsibility, or at least a make-believe version of fiscal responsibility that says that pretending to save taxpayer's money is the same as saving them money. The Senators know that the $245 billion price tag for SGR repeal is itself a budget fiction, because it requires that we suspend disbelief and assume that Congress will actually allow double-digit cuts in physician payments to go into effect. They won't and they know it. Medicare will end up spending the $245 billion anyway, but that doesn't matter, as long as the Senators can tell voters that they didn't vote for a bill that would add to the deficit.

ACP has released a statement that is harshly critical of the Senate vote and vowing to continue to push for SGR repeal. The statement takes on the charge that S. 1776 was offered in exchange for physician support of health reform:

"The American College of Physicians rejects the cynical charge made by some that physicians' support for health care reform is conditioned on repeal of the SGR. Instead, ACP supports health care reform because we believe that all Americans should have access to affordable care. Our positions on the pending health reform proposals will continue to be based on how they align with ACP's long-standing policies on ensuring coverage, reversing a catastrophic shortage of primary care physicians, and testing and implementing new models of payment and delivery to align positive incentives with the value of care provided. At the same time, we believe that repeal of the SGR is necessary to provide the stability needed to achieve real and lasting physician payment reform, to implement payment reforms to support the value of care provided by primary care physicians, and to assure seniors' access to care."

Where does this leave us on the SGR? Right where we were in . . . 2008, 2007, 2006, 2005, 2004, 2003, 2002, and 2001 . . . with Congress saying that they know the SGR has to go, that they won't allow the cuts to go into effect, that they know that have to find a permanent solution, but not now, some other time. Like the Chicago Cubs and a World Series appearance, it seems it is always "wait til next year" when it comes to repeal of the SGR.

Today's question: What is your opinion on the Senate's rejection of SGR repeal?

Thursday, October 15, 2009

Finally, a plan to end the lunacy of the Medicare SGR

Yesterday, I joined representatives from the AMA and other physician organizations in a meeting with the Senate Majority Leader Harry Reid (D-NV), Senator Max Baucus (D-MT), Senator Chris Dodd (D-CT) and Nancy Ann Deparle, the head of the White House Office for Health Reform, to discuss a plan to get rid of the Medicare SGR formula, once and for all. We learned that Senator Reid will ask the Senate to vote next week on a bill to repeal the SGR and all its accumulated scheduled cuts to physicians for the next 10 years.

It's about time. I can't think of a single other issue that has so bedeviled physicians and Congress alike as much as the SGR.

Under the Medicare sustainable growth rate (SGR) formula, physicians have faced deep annual cuts in payments since 2002. Congress has stepped in all but one year to enact a temporary "patch" to stop the next year's cut. But rather than accounting for the difference between the lower payments mandated by the SGR, and the higher payments under the patch, Congress has assumed that the higher spending will be made up with even an even deeper SGR pay cut the following year. This is why the "patch" for an estimated 5 percent SGR cut in 2008 resulted in a scheduled 10.5 percent SGR cut in 2009. And why the patch for the 10.5 percent SGR cut in 2009 balloons to a scheduled 21 percent cut in 2010.

To illustrate how crazy all of this is, imagine you worked for a small business, and imagine that your boss told you that your wages would be cut by 10 percent this year. Later, your boss announces that your company will not cut your wages, but that the only way the company can afford to stop the 10 percent cut will be to pretend to reduce your wages by 20 percent the following year. She tells you not to worry, though: they will just do the same thing next year - prevent the 20 percent cut by pretending that the cost will be made up by cutting your wages by 40 percent the following year. She adds, though, that the company has no intention of ever allowing the 40 percent cut to happen. They just have to pretend they will so their accountants will allow them to stop the immediate pay cut.

No small business would actual run its payroll budget this way. Yet this is the budget lunacy that Washington has employed to hide the true costs of stopping Medicare physician payment cuts.

On Monday, Senator Reid will bring S. 1776, the Medicare Physician Payment Fairness Act, to the Senate for a vote. The bill, introduced by Senator Debbie Stabenow, simply sunsets the SGR and eliminates all of the scheduled cuts in 2010 and subsequent years. Instead of using gimmicks to hide the cost of SGR repeal, as Congress has done in the past, the costs would be reflected in the estimates going forward of Medicare spending. Following Senate action, the House of Representatives is expected to take up the issue.

Once the SGR is repealed, Congress would have to design a new system for updating physician services with the input of the medical profession.

I applaud Senators Reid, Baucus, Dodd and the White House for making this commitment to end the lunacy created by the SGR, including the smoke and mirrors budget accounting designed to make the costs look lower than they really are. Getting the bill approved by the Senate is no sure thing, though. Senator Reid will need at least 60 votes to overcome procedural obstacles to its consideration. You can help him and ACP get the votes needed to get rid of the SGR, once and for all, by making a call to your Senators today. Click here for more information.

Today's question: What will you be doing to get your Senators to vote for S. 1776 and permanent repeal of the SGR?

Tuesday, October 13, 2009

A Snowe (flake) does not a GOP blizzard make

The decision by Senator Olympia Snow (R-ME) to vote "yes" today on the Senate Finance Committee (SFC) package does not mean that there suddenly will be a blizzard of Republican support for the pending health care reform legislation. She was the only Republican to vote for the bill, which was approved by the committee this afternoon on a 14 - 9 vote, with all of the Democrats voting in favor. It may be that she will end up being the only Republican, House or Senate, who votes in favor when the final tally on health care reform legislation is taken later this year. Still, in Washington it just takes a single vote from a member of each party to get the highly "coveted" bipartisan label.

By reporting out its bill, the Finance Committee has joined the Senate Health, Education, Labor and Pensions Committee (HELP) and three House committees in moving President Obama's signature domestic priority a step closer toward a debate on the House and Senate floors, and possibly, enactment. At no other time in U.S. history, going as far back as to 1912 when President Teddy Roosevelt first called for universal coverage, have health care reforms designed to cover (almost) all Americans made it to the House and Senate chambers for a vote.

This doesn't mean, though, that the road ahead is an easy one. The House and Senate leadership and the White House will have to reach agreement on such contentious issues as a public plan option, employer and individual mandates, taxes and fees, offsets/cuts to different stakeholders, the level of subsidies and benefits, and a myriad of other issues, all of which are far from being resolved. The Senate HELP bill and H.R. 3200 would provide higher levels of spending on a host of programs than the SFC bill, which will pose a challenge to Congress in coming up with a common approach that doesn't break the budget.

One of the budget issues that still has to be resolved is how to fund a solution to Medicare physician payment cuts. The House includes a long-term physician payment fix - at a budget cost $250 billion. To keep the price tag down, the SFC bill offers only a one year reprieve from the SGR cuts, with a much lower budget price tag. (The different approach to the SGR is the single biggest reason why the CBO found that the Senate bill pays for itself while H.R. 3200 does not.) The House reportedly is considering taking the SGR fix out of the health reform bill to keep the price tag down and, get a favorable CBO "score," so that it meets Obama's requirement that the bill not add "one dime" to the federal deficit. Even if taken out of H.R. 3200 itself, the House leadership and the White House continue to be committed to getting a long-term solution to the SGR physician pay cuts enacted this year, even if the cost ends up showing up somewhere else in the federal budget and not in the health reform bills. How to do this - in a way that will get the fiscal conservatives in both the House and Senate on board - remains unresolved. But the physician community - including ACP - will insist that Congress find a way to put an end to the cycle of SGR cuts, once and for all.

Finally, I expect we will see more and more interest groups sharpening their knives to kill parts of health care reform that they don't like, which could still result in health care suffering a death of a thousand cuts.

The SFC is far from perfect - ACP has its own list of major concerns about it - but the vote today was historic, in that it moves the United States closer than ever toward the goal of providing all Americans with access to affordable coverage. I hope we all keep our eye on the prize even as we try to change the things we don't like.

Today's question: What do you think of today's Senate Finance Committee vote?

Monday, October 12, 2009

The return of Harry and Louise?

It was only a matter of time, I suppose, before the interest groups that stand to make or lose billions of dollars would come out swinging against the pending health reform bills.

It wasn't supposed to be this way, of course. President Obama reached out early and often to different interest groups to try to keep them at the table, and for the most part, he succeeded in getting the most powerful among them - health insurers, labor unions, physicians, hospitals, and drug manufacturers - to hold their fire. Until now, that is.

With Congress inching toward a consensus on health reform legislation, the health insurance industry decided that now was the time to make its opposition known to the bill being considered by the Senate Finance Committee. America's Health Insurance Plans (AHIP), the successor trade association to the group that funded the "Harry and Louise" ads that helped kill Clinton's health reform plan, today released a report which claims that most Americans will pay thousands of dollars more in health insurance premiums if the Senate bill becomes law. Calling it a "blistering new attack" by the insurance industry, the AHIP-funded study by PricewaterhouseCoopers will provide "ammunition to Republicans attacking the legislation and might intensify the concerns of some Democrats who worry that the bill does not provide enough help to low- and middle-income people to enable them to buy insurance," writes Robert Pear in today's New York Times.

The timing of AHIP's report appears to be designed to undermine and potentially delay approval of the bill tomorrow by the Senate Finance Committee, the last of the congressional committees to complete action on health reform legislation.

Politics aside, is AHIP correct that the Senate Finance Committee bill will raise premiums? Ezra Klein, blogs in the Washington Post that "seriously engaging with its methodology probably gives it more credit than it deserves, making this seem like an argument between two opposing sides as opposed to a predictable industry hit job. But totally ignoring its claims means some of them might live unchallenged." He then proceeds to take apart most of the key assumptions behind the PricewaterhouseCoopers analysis.

I don't think AHIP will be the last stakeholder to try to mount public opposition to key elements in the bills. There is a sense among interest groups that time is running out on them, and if they want to make the bills more to their liking, they will have to go public with their opposition. Some of the grounds for their opposition, I am sure, will have merit and should be considered by Congress in crafting a final bill.

The problem is that we may be approaching a period where powerful interest groups that up until now have been saying "yes . . . but" to health reform will switch to "hell no . . . unless" each of their own particular objections are met, which of course is not possible. This in turn could cause public support to collapse, costing us the best chance in a generation to extend coverage to millions of Americans. Just ask Harry and Louise.

Today's question: What do you think of the insurance industry's decision to release a report, on the eve of the Senate Finance vote, claiming that most of us will see higher premiums if the plan passes?

Thursday, October 8, 2009

CBO says Senate bill will reduce the deficit, expand coverage to 29 million

Yesterday, the Congressional Budget Office (CBO) released its preliminary estimates on the impact of the Senate Finance Committee bill on the federal budget and providing coverage to the uninsured. The CBO estimates that the bill will reduce the federal deficit by $81 billion over the next ten years, and will likely continue to reduce the deficit in subsequent years. It would increase federal spending by $829 billion over ten years, but the higher spending would be more than covered by savings and revenue increases (taxes and fees) in the bill.

What would this spending buy? According to the CBO director's blog "The number of nonelderly people who are uninsured would be reduced by about 29 million, leaving about 25 million nonelderly residents uninsured (about one-third of whom would be unauthorized immigrants). Under the proposal, the share of legal nonelderly residents with insurance coverage would rise from about 83 percent currently to about 94 percent. Roughly 23 million people would purchase their own coverage through the new insurance exchanges, and there would be roughly 14 million more enrollees in Medicaid and CHIP than is projected under current law. Relative to currently projected levels, the number of people either purchasing individual coverage outside the exchanges or obtaining coverage through employers would decline by several million."

Who will pay? CBO says that the costs "would be partly offset by receipts or savings, totaling $311 billion over the 10-year budget window, from four sources: net revenues from the excise tax on high premium insurance plans, totaling $201 billion; penalty payments by uninsured individuals, which would amount to $4 billion; penalty payments by employers whose workers received subsidies via the exchanges, which would total $23 billion; and other budgetary effects, mostly on tax revenues, associated with the expansion of federally subsidized insurance, which would reduce deficits by $83 billion." Additional savings come from reductions in spending on Medicare in the following areas: "Permanent reductions in the annual updates to Medicare's payment rates for most services in the fee-for-service sector (other than physicians' services), yielding budgetary savings of $162 billion over 10 years (emphasis added italics), setting payment rates in the Medicare Advantage program on the basis of the average of the bids submitted by Medicare Advantage plans in each market, yielding savings of an estimated $117 billion (before interactions) over the 2010-2019 period, reducing Medicare and Medicaid payments to hospitals that serve a large number of low-income patients, known as disproportionate share (DSH) hospitals, by almost $45 billion." Another $22 billion would come as a result of recommendations from a Medicare Commission that would have the authority to bring proposals to Congress to reduce spending, which automatically would go into effect unless Congress passed an alternative with equivalent savings.

What happens next? The Senate Finance Committee is expected to vote on the bill next Tuesday, after which Senate Majority Leader Harry Reid will work to blend it with another version passed by the Senate's HELP committee. The merged bill would then have to be voted upon by the full Senate, and if it passes, reconciled with the version reported out of three House committees also making its way towards a vote.

ACP has prepared a preliminary analysis of how the SFC, HELP and House bill's compare to College policy in critical areas. The Senate Finance Committee, like the HELP and House bills, has many provisions that are consistent with ACP policies on coverage, workforce, and payment reform. At the same time, the SFC bill does not include a permanent solution to the Medicare SGR physician payment cuts, gives the Medicare Commission too much authority to propose and implement cuts without sufficient congressional oversight, would impose penalties on physicians who do not successful report on quality measures after several years of positive incentives, and reduce payments to physicians with the highest resource use - all areas of major concern to ACP.

The SFC bill and the favorable "score" by the CBO advance the prospects for health reform, but some of its provisions will be opposed by key constituencies. In addition to the concerns that physicians will have about the above provisions affecting physician payments, labor unions and insurance companies will likely howl about the excise tax on high cost plans, Republicans will say that the excise tax and individual mandates will raise taxes on the middle class, Medicare Advantage HMOs will object to the cuts in their payments, governors will object to shifting more Medicaid costs onto their states' budgets with insufficient federal funding, and progressives will object to the lack of a strong public plan option. President Obama will have his work cut out to negotiate a final bill with the Congress and not lose the support of key constituencies - especially doctors, health plans, hospitals, and labor unions - needed to push health reform over the finish line.

Today's questions: Do you think the Senate Finance bill advances the chances for health reform?

Wednesday, October 7, 2009

The Wall Street Journal tries to ignite a Civil War among physicians

Yesterday, the Wall Street Journal's editorial page launched an extraordinarily deceptive attack on "Obamacare" for waging a "war" on specialists to benefit primary care.

Let's start with the WSJ's dismissive attitude about primary care. "Compared to bread-and-butter primary care doctors, specialists cost more to train and make more use of expensive procedures and technology - and therefore cost the government more money. Even so, the quiet war Democrats are waging on specialists is astonishing," says the WSJ. Yet, as ACP has documented, these same "bread and butter" primary care physicians save taxpayers a lot of "bread" by improving outcomes for diseases like cancer and diabetes and preventing avoidable hospital admissions. You would think that a newspaper that likes to think of itself as a champion of fiscal responsibility would support the importance of primary care in saving taxpayers' money, instead of dismissing them as being less valuable than other specialists.

And what's with the WSJ's implication that general internists, pediatricians, and family physicians aren't specialists in their own right? In a recent policy paper ACP describes, the highly specialized skills required to be a primary care physician: "The IOM defines primary care as 'the provision of integrated, accessible health care services by clinicians who are accountable for addressing a large majority of personal health care needs, developing a sustained partnership with patients, and practicing in the context of family and community.' Primary care physicians provide not only the first contact for a person with an undiagnosed health concern but also continuing care of varied medical conditions, not limited by cause, organ system, or diagnosis . . . General internists are specially trained to solve puzzling diagnostic problems and can handle severe chronic illnesses and situations where several different illnesses may strike at the same time. They are also trained in the essentials of primary care internal medicine, which incorporates an understanding of disease prevention, wellness, substance abuse, and mental health."

Now, what about the Obama administration's alleged "war" on other specialists? The WSJ mixes up, confuses, connects, and distorts several different policy initiatives: provisions in pending health reform bills, supported by President Obama, to improve the accuracy and appropriateness of physician payments; and a completely unrelated regulatory initiative (which began long before the current administration came into office) to update Medicare's relative value units. The health reform bills being considered by Congress provide a relatively modest Medicare payment increase (5% in the House bill, 10% in the Senate Finance version) for designated services by primary care physicians. In the Senate version only, one half of this increase would be funded through 0.5% offsets to other physicians. Otherwise, the proposed primary care increases are funded with additional federal dollars at no cost to other physicians. The bills also would pilot test new payment models to increase payments to primary care physicians and other medical specialists alike for working together to achieve better outcomes, and create an expert panel to identify potentially mis-valued services under the Medicare fee schedule. Yet instead of applauding these efforts to improve the accuracy and value of Medicare payments so that tax payers are getting more value for the money they spend on Medicare, the WSJ condemns them. Go figure.

Finally, the editorial directs most of its ire at a proposed rule that would increase Medicare practice payments for primary care physicians and some other specialties, but lower them for cardiologists and oncologists. The origins of this proposal go back to 2006, when over 70 specialties urged Medicare to conduct an updated survey of physician practice expenses. Medicare subsequently contracted with the AMA to conduct a new survey, and in June of this year, it asked for comments on a proposal to use the new survey to update how much it pays physicians for their overhead costs. In ACP's comments to CMS , the College urged the agency to address, in an open and transparent manner, the concerns from cardiology and oncology about the application of the survey to their specialties, as it also expressed support for updating the practice expense payments for all specialties. But the essential point that the WSJ misses is that this whole regulatory process is part of Medicare's statutory responsibility to update physician payments on an annual basis, is independent of the health reform legislation being debated by Congress, and its origins pre-date the current administration. Sure, there can be legitimate differences of opinion on whether Medicare should proceed with the proposal as announced in June, but to label it as Obama launching a war on specialists, to benefit primary care, is absurd.

The WSJ may not like the fact that there is a broad and civil consensus within medicine, primary care and other specialties alike, on the need for more primary care physicians, including reforming physician payments to support primary care. It's true that no specialty wants to take a pay cut to increase pay to another, but medicine has, for the most part, been able to engage in a respectful discussion of such issues without making this a "primary care versus [other] specialists" issue. I hope that physicians will not allow the WSJ's to turn this civil discussion into a civil war.

Today's question: What is your opinion of the WSJ editorial?

Monday, October 5, 2009

The interconnectedness of health reform

One of the problems with reforming the health care system is it's so darn complicated. Critics have made a point of the House bill being over 1000 pages in length, and polls show that the public continues to be confused about key details.

It would be nice if there was a simple way of fixing the health care system that would take only a few pages of legislation and could readily be explained to the public. The reality, though, is that health care itself is so complicated that there are no simple fixes or easy explanations, and any effort to fix one part of the system will create multiple connections to other issues.

Remember the children's rhyme - "the toe bone connected to the foot bone, and the foot bone connected to the ankle bone, and the ankle bone connected to the leg bone ..." - well, the health care system is something like that. A policy that deals with one particular aspect will almost always be linked to another.

Take the popular idea of prohibiting insurance companies from excluding people with pre-existing conditions. It is hard to see such a requirement working though, without a requirement that people buy coverage (otherwise known as an insurance mandate). Otherwise, some people would just decide to go without insurance coverage until they get sick, knowing that insurance companies could no longer turn them down. This would screw up the whole concept of pooling risk. If you are in favor of requiring insurance companies to accept people with pre-existing conditions, you pretty much have to support a requirement that people buy coverage, because one won't work without the other. Yet many of those who support a ban on pre-existing condition exclusion are opposed to an individual mandate.

Similarly, take the idea of requiring large employers to provide coverage to their employees. Many of conservative critics who object to an employer mandate oppose expansion of government-funded health care. But when a company that can afford to provide coverage, but chooses not to, their employees will likely end up getting coverage from ... you guessed it ... Medicare, the SCHIP program, or private coverage subsidized by taxpayers. So the best way to limit the number of people covered under taxpayer-funded public or private plans, if that is your goal, is to link it to a requirement that large employers provide coverage to their employees.

Or, take the idea of expanding Medicaid to the poor. The Washington Post reports today that the governors of many states are concerned that the federal government will not provide them with enough money to pay for enrolling up to 11 million people in Medicaid. Also, the article notes that any expansion of Medicaid may not ensure access to care if the payment rates are so low that physicians refuse to treat Medicaid enrollees. The House bill has a provision to raise Medicaid rates for primary care until they equal the applicable Medicare rates but the Senate Finance bill lacks such a provision. Unless Congress provides states with the money needed to increase payments to physicians at the same time as it demands expanded coverage, the likely result will be that many of the newly covered won't be able to find a physician.

It is because of these many linkages that ACP has taken the view that incremental reforms that deal with only one part of the puzzle won't be effective. If we are going to subsidize coverage for the poor through Medicaid, then we will need to increase Medicaid payments to physicians. If we are going to prohibit insurers from excluding people with pre-existing conditions, then we will need to require people to buy coverage. If taxpayers are going to subsidize coverage for those who can't otherwise afford it, then we need to require that large employers - if they can afford it - provide coverage to their employees, or pay back taxpayers for shifting the cost onto the rest of us. And if we are going to provide everyone with access to an affordable health insurance plan, then we also need policies to ensure that there are enough physicians, particularly primary care doctors, to take care of them.

Today's questions: Do you agree that a ban on pre-existing condition exclusions needs to be linked to an individual mandate to buy coverage? That subsidies to help people afford coverage need to be linked to a requirement that large employers provide coverage? That expansion of Medicaid and other health insurance programs needs to be linked to increased payments to primary care physicians?

Friday, October 2, 2009

Will health reform help a Missouri bartender?

Early this morning, the Senate Finance Committee finished its work on amending the bill drafted by Chairman Max Baucus (D-MT). A final vote within the committee is expected next week. Baucus says he has the votes to get it out of committee although it remains unclear if Senator Olympia Snowe (R-ME) will vote in the affirmative, in which case she would be the sole Republican, Senate or House, to vote for the health reform overhaul. Assuming approval by the SFC, Majority Leader Harry Reid (D-NV) will work on melding the SFC bill with the version approved by the Health, Education, Labor and Pensions Committee, with a floor debate and vote in mid-October.

As the Washington Post reports, approval by the SFC and HELP committee and the three committees of jurisdiction in the House of Representatives, will take health reform farther along the road to enactment than any other time in American history. It is looking more and more likely that there is a consensus among Democrats to get a bill sent to President Obama for his signature. Nothing is assured, though, until the final votes are cast.

Although all of the attention is on Washington, I am reminded of a recent conversation with a woman in Missouri that reminds me of what health care reform is all about. I was in Missouri attending the ACP chapter meeting. Over several beers at the hotel bar, Dave Fleming, the ACP Missouri chapter governor, and I were debating whether health care is a right, privilege or societal responsibility. Our bartender overheard our conversation and asked if health care reform would help her and her family.

She said she has some serious health problems that require expensive medications, which are only partly covered by the health insurance plan offered by her employer. Her company plan also covers her 19 year old dependent daughter with a serious mental health condition. Her husband, an independent contractor who can't find coverage on his own, also relies on his wife's plan for coverage. She said that even with the insurance, her premiums and out-of-pocket health care bills are so high that "I don't know how we'll make it". She was planning to take a day off from work to plead with state Medicaid office to cover her daughter, even though she had already been advised over the phone that her daughter wouldn't qualify.

Dr. Fleming and I explained that health care reform might make her daughter eligible for Medicaid, because the pending bills would require the program to cover anyone up to 133% of the poverty level (we didn't ask her how much she and her husband earned). We also told her that she might be able to get subsidized coverage through a health exchange, and that insurers wouldn't be allowed to turn down her daughter or charge higher premiums because of her pre-existing mental health condition. She wistfully responded, "I hope so" but sounded unconvinced that the politicians in Washington would do these things for her.

As the politicians continue to debate the intricacies of such things as excise taxes, budget offsets, health exchanges, subsidies, mandates, and public options, I hope we don't lose sight of this Missouri bartender, and the millions of working American families, who can't afford health care and are looking to Washington for help. None of the bills making their way through Congress are perfect - far from it. But I believe the litmus test of whether the results are worth it is whether our Missouri bartender and her family can get good coverage at a price that they can afford.

Today's question: Do you have confidence that the politicians in Washington are going to produce a bill that provides help to this Missouri family and the millions like her?

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About the Author

Bob Doherty is Senior Vice President, American College of Physicians Government Affairs and Public Policy; Author of the ACP Advocate Blog

Email Bob Doherty: TheACPAdvocateblog@acponline.org.

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