By Mary Agnes Carey, CQ HealthBeat Associate Editor

June 22, 2007 -- Physicians told a House hearing Friday that the nation's emergency medical care departments are overwhelmed, understaffed, underfunded, and unready to take on the type of patient surge that could come with a major natural disaster or terrorist attack.

Despite numerous reports highlighting conditions such as patients being boarded in ER departments waiting for rooms elsewhere in the hospital or ambulances diverted to other facilities—creating treatment delays that have led to patients' deaths—federal agencies charged with overseeing the nation's emergency health care system have done little to ease the burden, witnesses told the House Oversight and Government Reform Committee.

"While the demands on emergency and trauma care have grown dramatically, the capacity to handle such demands has not kept pace," said C. William Schwab, who heads the University of Pennsylvania Medical Center's Trauma and Surgical Division. Schwab, who helped compile the Institute of Medicine's report released last June detailing key problems with ER departments and recommendations to fix them, noted that there has been little response from Washington.

"There has been perhaps some transient coverage in the media, several dissemination meetings in various parts of the U.S., but no response has come from our government," Schwab said in prepared testimony. "Despite efforts by all constituents, little seems likely to be done to begin to manage the biggest crisis in American health care."

Ramon W. Johnson, director of pediatric emergency medicine at Children's Hospital in Mission Viejo, Calif., and a member of the American College of Emergency Physicians' board of directors, said many factors are creating overcrowded conditions in ER departments throughout the country. Every day, he said, "critically ill patients line the halls, waiting hours—sometimes days—to be transferred to inpatient beds. This causes gridlock, which means other patients often wait hours to see physicians, and some leave without being seen or against medical advice," he said in testimony. Other factors that lead to overcrowding include reduced hospital resources, a lack of hospital inpatient beds, a growing elderly population, and nationwide shortages of nurses, physicians and hospital technical staff, Johnson said.

Committee member Elijah E. Cummings, D-Md., who chaired the hearing, said the Department of Health and Human Services (HHS) "appears to be ignoring the mounting emergency care crisis" despite the billions of dollars Congress has appropriated for biodefense and pandemic preparedness. Witnesses said the funding had not relieved any of the burdens in their emergency care departments, and Cummings said HHS has "not made a serious effort to identify the scope of the problem and which communities are most affected."

Cummings was clearly irritated that Leslie Norwalk, acting administrator for the Centers for Medicare and Medicaid Services, did not accept the committee's June 14 invitation to testify at the hearing. Of the 115 million emergency room visits in 2005, more than 40 percent were covered by CMS programs such as Medicare, Medicaid, or the State Children's Health Insurance Program. Norwalk said she could not attend due to scheduling difficulties and did not send another representative.

CMS spokesman Jeff Nelligan said the agency asked the committee to reschedule, but were refused. "However, we have provided written answers to several questions for which CMS input was sought," Nelligan said. Committee Chairman Henry A. Waxman, D-Calif., sent more questions to Norwalk on Friday, seeking comment in a variety of areas, such as what actions CMS has taken to address ER boarding of admitted patients in emergency rooms receiving Medicare and Medicaid funds or the diversion of ambulances from those facilities. Waxman asked Norwalk to respond by June 29.

By Greg Vadala, CQ Staff

June 19, 2007 -- Health care costs must be factored into medical decision-making in order to save money and improve quality, according to evidence-based medicine experts in a discussion posted Tuesday on the Web site of the health policy journal Health Affairs.

During a wide-ranging conversation, Dr. Sean Tunis, founder and director of the Center for Medical Technology and Policy in California, and Dr. David Eddy, founder and medical director of Colorado-based Archimedes Inc., discussed how the health care system is not required to take economic considerations into account when making decisions about medical coverage and about the consequences for the public—specifically a lower quality of health care—if such costs continue to be ignored.

"I believe that our failure to explicitly consider costs in medical decision making is the single greatest flaw in our health care system," Eddy said.

By not addressing costs, Eddy said, quality is being diminished and financial resources are being wasted. The result is a system that is too expensive and that benefits those whose incomes are based on costs, such as cardiologists and device manufacturers, he said.

Tunis, who was the former chief medical officer at the Centers for Medicare and Medicaid Services (CMS), said in an e-mail that one of the obstacles to instituting cost consideration is that there is a reluctance to have a serious policy discussion about economics and health care decisions. The reason, he said, is that policy makers fear they will be accused of trying to "ration" care.

"My view is that there will continue to be downward pressures on health care spending, and they will either be done with information about value or they will be insensitive to information about value, and I think that the former is preferable from a public health perspective," Tunis said.

Although there is no law that prohibits Medicare or Medicaid from considering health care costs in coverage or payment decisions, Tunis said Medicare has a longstanding practice of not explicitly considering health care costs in coverage decisions. Because of this, he said, it is likely that a statutory or regulatory change would be necessary in order for the program to begin to do so.

However, there are instances when consideration of health care costs does play a part in coverage decisions, Tunis said. He pointed to a recent Medicare decision to expand coverage for implantable cardioverter-defibrillators at a cost of more than a billion dollars per year as an example of how health care costs, even when not explicitly considered, play a less visible role in coverage decisions.

Tunis discussed how CMS reconsidered its coverage policy for implantable cardioverter-defibrillators (ICDs) following the release of a study showing that many additional beneficiaries might benefit from ICDs. CMS expanded it coverage, but not to the extent previously recommended by a joint committee of the American College of Cardiology and American Heart Association.

"The potential impact on Medicare spending or cost-effectiveness of ICDs was really not discussed much within the agency or within the Department of Health and Human Services when the decision was made," Tunis said.

Tunis said he and others at CMS understood that ICDs were expensive and that there were many additional people who might be eligible for an ICD, which in turn added up to a large amount of money.

"I think that our implicit level of concern about costs was different and perhaps influenced the analysis of evidence and the conclusions drawn by each organization," Tunis said.

He and Eddy agreed that pay-for-performance programs and the public reporting of quality measures will not save money without consideration of health care costs. To save money, Eddy said, performance measures must be based on value and not just on the evidence of benefit.

Congressional Budget Office Director Peter R. Orszag is now looking to evidence-based medicine as a way to mitigate rising health costs. During an industry conference last month, Orszag outlined his concerns about Medicare and Medicaid spending and the lack of resources dedicated to cost analysis. He proposed the creation of a new research entity that would use evidence-based medicine to control escalating health care costs, similar to the United Kingdom's National Institute for Health and Clinical Excellence (NICE).

By John Reichard, CQ HealthBeat Editor

June 21, 2007 -- Congressional Budget Office Director Peter R. Orszag may not yet have ascended to guru status on the issue of growing health care costs, but that wasn't necessarily apparent from persistent questioning he got from members of the Senate Budget Committee at a hearing Thursday on soaring health care spending.

As worries grow on Capitol Hill about spiraling health costs, lawmakers are turning more and more to Orszag for answers on a wide range of policy questions dealing with the problem. The razor-sharp Orszag isn't shying away from the challenge of taking on that role—he regards climbing health care spending as the top fiscal threat facing the nation, and is remolding CBO to address the issue. "We're increasingly becoming the congressional health office—and we need to," Orszag told Rhode Island Democrat Sheldon Whitehouse at the hearing.

The news on Thursday seemed not so much what Orszag said—he has said much of it before—but how intently lawmakers are listening. Panel Chairman Kent Conrad's, D-N.D., focus was particularly sharp on the issue of high levels of payment to Medicare Advantage plans, the private health plans in Medicare. And he seemed particularly enthused about Orszag's suggestions about the potentially huge savings that could be achieved by eliminating regional variations in the practice of medicine in the United States.

Indeed, the Senate budget panel appears to taking the issue far more seriously, with its top Republican, Judd Gregg of New Hampshire, challenging Conrad's leadership on the issue, and Conrad himself launching a series of hearings to consider health system changes. "We know what we need to do," Gregg told Conrad before the hearing. "The problem is that we do not have, as a Congress, the courage to do this."

Perhaps the key statistic Orszag offered on Thursday was that at current rates of spending growth, Medicare and Medicaid will make up 20 percent of the Gross Domestic Product 40 years from now, "roughly the share of the economy now accounted for by the entire federal budget." In response to Conrad's query about whether the Medicare Advantage program is exacerbating the problem, Orszag responded with an unequivocal "yes."

"We've got a runaway train here," Conrad said. "Nineteen percent of Medicare enrollments are now in Medicare Advantage—that's up from 13 percent in 2004—what do you see as the implications for the cost of Medicare, the future of Medicare?" Conrad asked.

"Senator, if over the next couple of years the rate of growth that we have experienced recently in Medicare Advantage were to continue, I think the result would be a fundamental change in the nature of the Medicare system that may then be hard to reverse," Orszag said. The more rapid that growth under current law, "the more fundamental the change in the current nature of the Medicare system, and the higher the cost of system," he said.

"It may become even more of a challenge to get all this under control, am I hearing you correctly?" Conrad responded.

"Yes you are, senator," Orszag replied.

He continued, "The rate at which health care costs grow relative to income is the most important determinant of the long-term fiscal balance; it exerts a significantly larger influence on the budget over the long term than other commonly cited factors, such as the aging of the population." The CBO director suggested that evening out regional variations in the way health care is practiced could produce savings in health care spending of up to 30 percent, based on findings by Dartmouth College researchers that areas of the country with lower spending have health care quality as good or better than areas with higher spending.

Conrad calculated those findings meant savings of $600 billion a year "if we had the practices that already are pursued in large parts of the country." Orszag didn't disagree, but said much more data is needed on what works in medicine to make that happen and that doctors and hospitals then must be given economic incentives to pursue "value care rather than just churning high-cost" forms of care not shown to have value.

But Orszag was more cautious about projecting savings from other reforms favored by lawmakers, such as better preventive care, and "wellness" programs to maintain good health. "Although proposals that encourage more prevention and healthy living can help to promote better health outcomes, their effects on federal and total health spending are uncertain," he said.

In his comments, Gregg chided Conrad for not pursuing budget cuts favored by the Bush administration to make Medicare payments to providers more "accurate" and to charge higher premiums to wealthier Medicare beneficiaries. That would have been a real first step toward addressing the fiscal challenge, Gregg said.

Meanwhile, lawmakers can expect to hear more from Orszag in coming months. He noted in his testimony that his office is coming out with new reports estimating the savings potential of health information technology and ranking the various factors that contribute to health care spending growth. One such report on the potential of research comparing the effectiveness of health care treatments is due shortly.

By Ryan Kelly, CQ Staff

June 19, 2007 -- Representatives from health advocacy groups Tuesday announced that a poll of 1,000 likely voters showing widespread support for increasing the federal tobacco tax to reauthorize and expand the State Children's Health Insurance Program (SCHIP).

According to the survey, 67 percent of voters support a 75-cent increase in the federal cigarette tax to fund health care coverage for uninsured children.

While members of Congress are often hesitant to raise taxes and risk incurring the wrath of voters, the poll was just the latest to show that Americans view taxing tobacco differently than other taxes, said Ron Pollack, executive director of the consumers group Families USA. Other groups at Tuesday's event included representatives from America's Health Insurance Plans, the American Medical Association, the American Hospital Association, and the American Cancer Society.

Pollack said the support for a 75-cent increase on the tobacco tax was about the same as support for a 30-cent increase, which 70 percent of voters favor. "Americans see this as a public health issue," he said. "And the support of the public does not vary with the size of the tax increase.

"We will support any increased tax on tobacco to help fund the SCHIP program and we want to let Congress know that the American people will too," Pollack said.

What does vary with the size of the increase is the number of people who take up and quit smoking, said Ronald M. Davis, president-elect of the American Medical Association. "For each ten percent increase in the cost of cigarettes, seven percent fewer teens start smoking and smoking drops in Americans in general by four percent," Davis said.

The groups said Tuesday that the decrease in smokers resulting from the increased price of cigarettes would not substantially decrease revenues, pointing to a Congressional Budget Office report that showed that a 61-cent per pack increase proposed by Sen. Gordon H. Smith, R-Ore., would produce $35 billion in additional revenue over the next five years, even with the anticipated decline in number of smokers. In March the Senate voted 59–40 vote to adjust its fiscal 2008 budget resolution to allow for an increase in federal cigarette taxes of no more than 61 cents per pack. The amendment assumes the revenue would be used to reauthorize SCHIP, but the language wasn't binding.

With the SCHIP shortfall this year estimated at $700 million, raising the tobacco tax would be a windfall for public health, said Tom Nickels of the American Hospital Association. "Fewer smokers and the $50 billion dollars saved in associated lifetime health care costs, while expanding coverage for uninsured children, is a win–win."

The coalition voiced its support of a tobacco tax at least as high as the one Smith has proposed, but expect a more modest increase to make it into the SCHIP bill that Senate Finance Committee Chairman Max Baucus, D-Mont., is currently putting together. Smith, a member of the Finance panel, told reporters Tuesday that in his view, Baucus is not quite on board with increasing the federal tobacco tax as a way to finance SCHIP reauthorization, but rather is more focused on other funding options, such as reducing Medicare payments to Medicare Advantage plans, private health insurers offering coverage to Medicare beneficiaries. A tobacco tax increase, Smith said, is "the real money for an SCHIP reauthorization" and he said he thinks the idea is gaining momentum. A Baucus aide said Tuesday the Finance chairman is "focused on finding the right policy" for SCHIP and that "the policy will determine the total cost of the bill, and he will continue to work closely with his colleagues to identify the right package of offsets."

Baucus has stated that SCHIP reauthorization is one of his highest priorities, with a bill expected to go through mark-up and be ready for floor consideration by the July 4 break.

Alex Wayne contributed to this story.

By CQ Staff

June 22, 2007 -- Leaders of the Senate Health, Education, Labor and Pensions Committee, joined by Sens. Hillary Rodham Clinton, D-N.Y., and Orrin G. Hatch, R-Utah, introduced legislation Thursday they said would boost adoption nationwide of health information technology.

Committee Chairman Edward M. Kennedy, D-Mass., and Ranking Republican Michael B. Enzi of Wyoming said in a press release that the measure would cut administrative costs, end duplicative testing, and reduce fatal errors caused by lack of timely access to medical information.

"Time is of the essence—without uniform standards, the industry is moving forward in a fragmented and disjointed direction," Enzi said. "By passing this bill, we can establish an interconnected, nationwide health technology system to improve the quality of care in this country," he said.

The legislation would take several steps to encourage the development of uniform standards for health IT, including codifying the role played by the National Coordinator for Health Information Technology in overseeing federal policy development. It would require development of a national health IT strategy that includes strong privacy protections, establish grants to help providers acquire IT and fund clinical education to help doctors incorporate IT in medical practice.

By John Reichard, CQ Health Beat Editor

July 21, 2007 -- House Ways and Means Health Subcommittee Chairman Pete Stark, D-Calif., said Thursday he hopes to move legislation this summer that would tighten oversight of drug coverage plans offered under the Medicare Part D prescription drug program. Provisions may include language giving state insurance regulators authority to oversee insurers marketing the plans, requiring public disclosure of enforcement action taken against drug plans that violate Medicare regulations, and mandating coverage of benzodiazepines, a category of drugs used to tranquilize nursing home patients, among other uses.

Another provision would require the same open enrollment periods for the two types of drug coverage offered in the Part D program: stand-alone prescription drug plans, or "PDPs," sold to beneficiaries in traditional Medicare; and "MA-PDs," the prescription drug plans offered as a part of the private health plans sold through the Medicare Advantage program. Stark also would put in statute the current Medicare regulation requiring drug plans to cover six therapeutic categories of drugs.

Stark laid out the specifics at a hearing to examine how well the Part D program is working. "I hope this . . . will lay the groundwork for improvements to Part D that may be included in the Medicare sections of forthcoming health legislation we hope to move this summer," he said in his opening statement.

More broadly, Stark said his goal is to make it easier to compare drug plans, but he didn't specify whether he will seek to do so in the legislation, which also is expected to trim Medicare payments to a range of providers to pay for coverage of uninsured children. "I hope we can at least talk about standardizing Part D products so beneficiaries are better able to compare the 50 or more plans available in their communities," he said.

Witnesses at the hearing described a variety of improvements that need to be made to Part D, including smoother access to AIDS medications, ensuring accurate premium deductions from Social Security checks, and ending delays in enrolling the most frail Medicare beneficiaries in drug coverage plans.

Leslie Norwalk, acting administrator of the Centers for Medicare and Medicaid Services, said that ensuring accurate premium deductions is the number one remaining implementation problem the agency faces. She said that there is no "quick fix" for the problem, which occurs in some cases when beneficiaries first sign up for coverage.

Kathleen King, health care director at the Government Accountability Office, said that it takes up to five weeks to complete the enrollment of certain "dual-eligibles"—Medicare beneficiaries who also qualify for Medicaid benefits—when they first enter the Part D program. Because of delays in getting pharmacies up-to-date enrollment information, beneficiaries may have difficulty getting their prescriptions filled during that period, she said. King said the problem primarily affects people who first qualify for Medicare and later for Medicaid. She estimated the problem affected some 400,000 beneficiaries this year.

"CMS did not fully implement or monitor the impact of this policy," King said. "Although beneficiaries are entitled to reimbursement for covered drugs during this retroactive period, CMS did not begin informing them of this right until March 2007," she said. She estimated that plans were paid a total of $100 million for periods in which beneficiaries may not have been able to get prescriptions filled and for which they may or may not have later sought reimbursement.

Stephen O'Brien, medical director of the Alta Bates Summit Bay AIDS Center in Oakland, said many of the patients he treats have experienced problems with the Medicare drug benefit. "Patients have had trouble accessing anti-retrovirals and treatment for opportunistic infections," he said. "Patients have gone without medications they can't afford or can't access through their new plans. Changes in plans have caused disruption in patients' access to long-term medications." Many doctors who treat AIDS patients say they are worse off under Medicare than they were under Medicaid, he added.

O'Brien emphasized the seriousness of the problems. Successful suppression of the AIDS virus requires uninterrupted use of anti-retroviral drugs, he said. But access problems aren't limited to anti-retroviral drugs. "Many patients have had difficulty receiving the anti-fungal fluconazole to treat cryptococcal meningitis," he said, which has led to "prolonged hospitalizations and gaps in treatment."

Paul Precht, policy director of the New York City–based Medicare Rights Center, said based on calls his center has received, beneficiaries are having difficulty getting enrolled, getting access to affordable medications, and obtaining coverage for medications once they are enrolled in a Part D plan. Precht said for example that "recently, we have been working to prevent people with Medicare from being dropped by their Part D plan for non-payment of premiums. These individuals are having Part D premiums deducted from their Social Security checks, but because of system problems, premiums are not finding their way to Part D plans."