By Adam Bloedorn, CQ Staff

September 17, 2007 – Hospitals that participated in the incentive program known as pay for performance showed significant improvement compared to non-participating hospitals, improving quality of care by 11.8 percent on average, according to research conducted by Premier Inc., a hospital consortium.

Premier's findings were among those announced Friday during a forum at the National Press Club, where health care providers discussed results collected from various programs targeting patient safety and health care quality. The event was sponsored by the Blue Cross Blue Shield Association and is part of the Institute for Healthcare Improvement's 5 Million Lives Campaign, a 24-month program started in 2006 that seeks to prevent five million medical incidents that could harm patients.

Premier worked with the Centers for Medicare and Medicaid Services over the past two years to study the quality of care at 260 hospitals in five clinical areas: acute myocardial infarction, heart failure, community-acquired pneumonia, coronary artery bypass graft, and hip and knee replacement. Pay for performance, also dubbed "P4P," is a program in which hospitals can receive monetary bonuses for improved performance.

Blue Cross Blue Shield of Alabama said between 2002–2006, Alabama hospitals were able to able to decrease costs for treatments of hospital-acquired infections by 35 percent by stressing preventative measures. Hospitals in the program used real-time electronic data to improve tracking of infections, which account for over 85,000 deaths per year in the United States, according to Executive Vice President Terry Kellogg.

By John Reichard, CQ HealthBeat Editor

Sept. 21, 2007 – House and Senate negotiators finally came together Friday on an agreement blending provisions passed by their respective chambers to reauthorize the State Children's Health Insurance Program. When and whether the provisions will ever take effect is unclear in light of the pledge by President Bush to veto the package as well as the difficulty, particularly in the House, of overriding the expected veto. But even if Bush prevails and SCHIP is extended by a year or two without any expansion, the provisions of the agreement could eventually be dusted off and become the starting point for new efforts to expand the program after Bush leaves office.

As expected, the agreement calls for added spending of $35 billion over five years in addition to current spending levels of some $5 billion a year, making a total of $60 billion in spending on the program. It would no longer be known as "SCHIP," but rather as "CHIP," or the Children's Health Insurance Program. According to a summary released by the Senate Finance Committee—legislative language isn't expected to be available until Monday—the agreement also would:

• Preserve coverage for 6.6 million children currently covered by the program. The agreement also would reduce the number of uninsured children by almost four million, pending final estimates from the Congressional Budget Office.
• Require dental coverage for all children enrolled in the program. "The agreement also ensures that states will offer mental health services on par with medical and surgical benefits" covered under the program. In addition, it protects "EPSDT" benefits, which stands for Early Periodic Screening Diagnosis and Treatment benefits that advocates for low-income patients are essential to quality care.
• Modify populations eligible for coverage. States would have the option to cover pregnant women as well as to cover them through other approaches, such as seeking approval of waivers from the Centers for Medicare and Medicaid Services (CMS). Coverage of childless adults would be phased out after a year, with temporary Medicaid funding provided to cover those now enrolled in SCHIP through waivers. States also would be permitted to apply for a waiver to cover these adults in Medicaid.
• Give states enrollment incentives. The agreement would allow "additional up-front funding for states planning improvements to their" CHIP programs. "States that face a funding shortfall and meet enrollment goals will receive an adjustment payment to ensure that no child who is eligible for Medicaid or CHIP is denied coverage or placed on a waiting list." But "the formula also sets in place new overall caps on federal funding to ensure the program's expenditures do not exceed the amounts authorized."
• Replace CMS restrictions on enrollment announced Aug. 17. Instead of the provisions in the letter meant to prevent "crowd out"—substitution of private coverage with government-funded coverage—the agreement "gives states time and assistance in developing and implementing best practices" to prevent substitution. The agreement also would phase in a requirement for covering low-income children first as a condition for funding coverage of children above 300 percent of the poverty level.
• Strengthen enrollment efforts. The deal would provide $100 million in grants to states, local governments, schools, community organizations, safety-net providers and others to enroll children in CHIP programs.
• Expand premium assistance programs. The agreement would make it easier for CHIP programs to enroll children in employer-provided private coverage by helping families with their premium payments.

By Mary Agnes Carey, CQ HealthBeat Associate Editor

September 17, 2007 – Democratic presidential candidate Hillary Rodham Clinton unveiled a sweeping universal health care plan Monday that includes an individual mandate requiring each American to have health insurance. Individuals could keep their current coverage or pick from the same menu of private coverage options available to members of Congress, and the plan would provide refundable tax credits to help individuals pay their premiums.

Clinton's proposal, which reportedly would cost the government about $110 billion a year, also would allow Americans to choose a coverage option similar to Medicare, the federal health care insurance program that now covers more than 43 million elderly or disabled Americans. Employers would be required to provide health care coverage or pay into a fund that would finance coverage for the uninsured. Small businesses would receive tax credits to continue offering coverage or to begin offering it to their workers. Insurers could not deny coverage based on a pre-existing medical condition or charge excessive premiums.

"My plan covers all Americans and improves health care by lowering costs and improving quality," Clinton said during a speech at Broadlawns Medical Center in Des Moines, Iowa. "It's a plan that works for America's families and America's businesses, while preserving consumer choices."

Critics said Clinton's plan would add to the federal bureaucracy, contrary to her claims that it would not. Republicans and Democrats alike said the plan would be as unsuccessful as her ill-fated attempt in 1993 to revamp the nation's health care system.

"If you liked Michael Moore's 'Sicko,' you're going to love HillaryCare 2.0," said Katie Levinson, communications director for Republican presidential candidate Rudy Giuliani. "Sen. Clinton's health care scheme includes more government mandates, expensive federal subsidies and more big bureaucracy—in short, a prescription for an increase in wait times, a decrease in patient care and tax hikes to pay for it all."

Another GOP presidential contender, Mitt Romney, called Clinton's plan "bad medicine" that would rely on "government insurance, instead of . . . . private insurance."

Clinton, D-N.Y., said Monday her plan would be financed by reducing waste, fraud, and abuse in the health care system and by discontinuing some of the Bush administration's tax cuts for individuals making $250,000 or more. The plan would protect the current exclusion from taxes of employer-provided health premiums, except for some premiums paid for "very generous" plans provided to individuals making over $250,000.

The universal health care proposal is a component of her three-part approach to ensure health care coverage for all Americans. In May, she released a plan to increase national investment in health care information technology, place greater emphasis on preventative medical care, and overhaul the nation's medical malpractice system.

Clinton's Democratic rivals said Monday her plan would not provide universal coverage. Sen. Barack Obama, D-Ill., said Clinton's plan was similar to the one he proposed last spring, adding "My universal health care plan would go further in reducing the punishing cost of health care than any other proposal that's been offered in this campaign." Unlike Clinton, Obama would not require that individuals purchase health care coverage, known as an "individual mandate."

At a speech to the Laborers Leadership Convention in Chicago, Democratic candidate John Edwards—who does favor the individual mandate—said if he were elected president he would introduce legislation that would end health care coverage for the president, all members of Congress and all senior political appointees in both branches of government by July 20, 2009, unless all Americans had health care insurance. "If you defend the system that defeated health care, I don't think you can be a president who will bring health care," Edwards said.

Karen Ignagni, president and CEO of America's Health Insurance Plans, a trade group representing health care insurers, said while Clinton's plan "includes important ideas to make coverage more affordable; unfortunately, some of the divisive rhetoric seems reminiscent of 1993." Ignagni added that insurers back universal coverage and the group has offered its own proposal to achieve that goal.

By Sasha Bartolf, CQ Staff

September 18, 2007 – A government report released Tuesday found that an individual's income, the number of people in the area who are uninsured, and the concentration of physicians within that area significantly influence regional health care costs.

The Centers for Medicare and Medicaid Services study, published by Health Affairs, found that people in the New England and Mideast regions spent 20 percent more in 2004 on health care services than the national average. Alaska and the nine northeastern states, Massachusetts, New York, Connecticut, Maine, Delaware, Rhode Island, Vermont, West Virginia, and Pennsylvania, had the highest concentration of physicians to population and the lowest share of uninsured populations, in addition to high income levels among residents.

Several of those states also had more generous Medicaid programs, which led to higher health care spending. In New York, the per-enrollee Medicaid spending was $10,173, and accounted for nearly 32 percent of total health spending, nearly double the national average.

Anne Martin, an economist at CMS' Office of the Actuary and co-author of the report, said in a press release, "Most of these states have consistently had the highest spending over time . . . but there are several similar characteristics among these states." For example, four states—Massachusetts, New York, Delaware, and Connecticut—had high per capita income. Six states, Massachusetts, New York, Connecticut, Rhode Island, Vermont, and Philadelphia, had among the highest concentrations of doctors to population and among the lowest representation of uninsured individuals, according to study authors.

However, the number of people enrolled in Medicaid was not found to influence spending levels. New York was among the highest Medicaid spenders, while having a larger-than-average population who received Medicaid. Unlike New York, New Mexico had more Medicaid recipients than the majority of states, but spent little on health care compared to the national average.

Meanwhile, New Mexico and other states in the Southwest and Rocky Mountain regions spent less than the national average on health care. For instance, rural areas tend to have fewer hospitals and physicians than densely populated states in the Northeast. The cost of living also is less in these areas than in the Northeast and Mid-East regions, affecting the going-rate for health care. But the lower per capita personal income of the people in these regions also meant they had less money and access to health services than those in other states, the study found.

The report also stated that per capita spending on prescription drugs grew faster in 1998–2004 than in 1991–1998. This is attributed to expanded prescription drug coverage, lower co-payments, an influx of "blockbuster drugs"—drugs that make more than $1 billion in revenue—and expanded Medicaid and state-sponsored coverage for drugs.

John Holahan, director of the Urban Institute's Health Policy Center, said that politics and budget considerations would make eliminating the health care variations from region to region difficult. He warned that if no federal action is taken, low-income people will "continue to be treated very differently depending on where they live."

By John Reichard, CQ HealthBeat Editor

September 19, 2007 – Critics of children's health insurance bills passed by the House and Senate (HR 3162, HR 976) say the proposals direct too much federal money toward funding coverage of middle-class children, but in fact most kids covered by the proposals would come from low-income households, according to a new analysis by the Urban Institute.

Both bills reauthorize the State Children's Health Insurance Program (SCHIP) in a way that continues coverage of current enrollees while extending coverage to new enrollees. The Senate bill would boost spending for SCHIP by $35 billion over five years to a total of $60 billion, while the House bill would boost spending by $47 billion to a total of $72 billion. House and Senate negotiators have tentatively agreed to the Senate-passed spending figure, but negotiations continue.

Seventy percent of all children who would gain or retain SCHIP or Medicaid coverage under the Senate SCHIP bill live in households with incomes below 200 percent of the federal poverty level, according to the analysis (the SCHIP program boosts Medicaid enrollment because efforts to recruit enrollees also bring in children with lower household incomes, qualifying them for Medicaid rather than SCHIP). Seventy-six percent of all children who would gain or retain SCHIP or Medicaid coverage under the House SCHIP bill come from households with incomes also below 200 percent of the poverty level, the researchers said.

Those figures include not only uninsured children obtaining coverage under the SCHIP program, but also those with private coverage who switch to SCHIP. Of the four million to five million uninsured children who stand to gain coverage under the House and Senate bills, between 78 percent and 85 percent live in households with incomes below 200 percent of the federal poverty line, the analysis said.

The Bush administration says the House and Senate bills would shift the program too much away from its original intention of covering children whose families have low incomes but make too much to qualify for Medicaid. The administration has set a requirement that 95 percent of children from households with incomes below 200 percent of poverty be enrolled in SCHIP before states can undertake to enroll children at higher income levels. Critics say that standard will cause many current SCHIP enrollees to lose coverage.

New Jersey has boosted SCHIP eligibility to 350 percent of the federal poverty line, the highest income eligibility in the nation. Defenders of that level say the state has the highest cost of living in the nation. The administration recently turned down a request by New York state to raise SCHIP eligibility to 400 percent of the poverty level.

According to the Urban Institute analysis, "very few of the children targeted under both bills have incomes above 300 percent of the federal poverty level."

Galen Institute President Grace-Marie Turner, a conservative critic of the House and Senate bills, didn't dispute the findings of the study that the measures would mainly benefit low-income kids.

"That's fine," she said. "We're saying cover as many kids as you can under 200 percent of poverty, but don't expand it to the higher income categories. They're making my point."

Turner said that both bills are flawed because they contain incentives for states to switch their focus to enrolling children in income categories above the 200 percent mark when there are plenty of kids to enroll below that level. Based on a conversation she had with a senior Medicaid official, the federal government, in some cases, could pay 90 percent or more of the cost of enrolling children in the higher income brackets under provisions of the House bill, she said.

Urban Institute data on the number of uninsured children below 200 percent of poverty who are eligible for the existing SCHIP program have previously stirred controversy. An analysis by the organization's Income and Benefits Policy Center earlier this year found far few SCHIP-eligible uninsured children in that income category than did other analyses, including one by its health policy center.

Genevieve Kenney, the lead analyst for the new study on the children affected by the House and Senate bills, is with the Urban Institute's Health Policy Center.

By CQ Staff

September 20, 2007 – A Families USA analysis of Census Bureau data finds that more than one out of three people under age 65—approximately 89.6 million Americans—were uninsured at some point during 2006–2007.

Most of the uninsured lacked coverage for long periods of time, the study found. Nearly two-thirds were uninsured for six months or more and over half were uninsured for nine months or longer, according to the report, which was released Thursday.

Four out of five of the uninsured were from working families, with 70.6 percent employed full time and 8.7 percent employed part time. Of the total 89.6 million uninsured, 64.2 million were between 18 and 64 and more than a third were ages 25 to 44, the age group that makes up the largest percentage of the uninsured.

The Families USA analysis examines the uninsured over two two-year periods, 1999–2000 and 2006–2007, rather than the annual Census Bureau analysis, which measures the uninsured over a period of one year. The Families USA data also measures the number of people who were uninsured for different lengths of time.

"The huge number of people without health coverage over the past two years helps to explain why health care has become the top domestic issue in the 2008 presidential campaign," said Ron Pollack, executive director of Families USA. "The expansion of health coverage in America is no longer simply a matter of altruism about other people but a matter of intense self-interest."

Senate Finance Committee Chairman Max Baucus, D-Mont., said the report's findings "underscore the need for Congress to complete its work to extend the Children's Health Insurance Program to millions more low-income, uninsured children, and for the president to end the veto threat that would cause even more kids to become uninsured."