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January 22, 2007

Washington Health Policy Week in Review Archive 7c9939a3-13bd-4d8b-94bd-cad24bade538

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Drug Benefit, Uninsured on Ways And Means Agenda

By Mary Agnes Carey, CQ HealthBeat Associate Editor

January 18, 2007 -- Oversight of the Medicare drug benefit, health savings accounts, and the adequacy of the budget and staffing for the Centers for Medicare and Medicaid Services (CMS) are all priorities this Congress for the House Ways and Means Health Subcommittee.

In a letter sent Wednesday to chairmen of the House Government Reform and House Administration committees, the bipartisan leadership of the Ways and Means panel laid out their priorities for the full committee and subcommittees.

"We will be rolling up our sleeves and working in a bipartisan fashion to deal with the challenges facing America," Chairman Charles B. Rangel, D-N.Y., and ranking member Jim McCrery, R-La., said in a news release. "There will be times when we cannot agree with each other, but we hope to work together whenever we can and disagree respectfully when we don't."

Other issues to come before the panel's health subcommittee include the relationship between Medicare payment policy and workforce issues, adequacy of program benefits, and competitive bidding for durable medical equipment.

Drug pricing within the Medicare prescription drug program is another area for review, as is "creating a Medicare-sponsored drug option; and negotiated price mechanisms," the letter states.

Oversight of the Medicare "trigger"—the point at which federal revenues will account for 45 percent of Medicare spending, now projected to be 2012—is on the list, as is oversight of CMS, including "the adequacy of its budget and staffing, contracting activities, and general agency accountability." The panel also expects to review health coverage and the uninsured, including children, early retirees, and small business employees and review options to expand coverage.

Separately, the Ways and Means Oversight Committee plans to continue its review of tax-exempt organizations and how recently enacted tax provisions affect those organizations' ability to serve their communities. The panel also plans to "evaluate overall IRS efforts to monitor tax-exempt organization activities, prevent abuse, and ensure timely information to the public about charity activities and finances," the letter states.

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From the CQ Newsroom: SCHIP Expansion Plan Taking Shape

By Drew Armstrong, CQ Staff

January 18, 2007 -- The health care industry's "strange bedfellows" got back together Thursday to push a proposal designed to provide insurance for most of the nation's children and many adults who lack coverage.

Under the banner "Health Care Coalition for the Uninsured," advocates representing insurers, hospitals, physicians, drug makers, and consumer groups proposed an expansion of Medicaid and the State Children's Health Insurance Program (SCHIP), along with tax credits, to offer health insurance coverage to half of the nation's 46.6 million uninsured.

Their plan would be implemented in two phases. First, SCHIP funding would be expanded by $45 billion, which would be used to cover about 98 percent of the nation's 9 million uninsured children. Second, Medicaid would be expanded to make eligible all adults at or below the federal poverty level. Tax credits would be given to families at up to 300 percent of the federal poverty level to help them purchase privately supplied insurance.

The coalition had not estimated the cost of the second phase.

SCHIP is due to be reauthorized early this year, and the coalition has been lobbying lawmakers to make the reauthorization the jumping-off point for their plan.

Notably absent from the coalition were representatives from labor and business groups who have been prominent at other recent health care coverage discussions.

"We are strange bedfellows, but let me be clear, we are not interested in a one-night stand," said Ron Pollack, director of the consumers group Families USA.

Several labor groups, however, have not come calling. The Service Employees International Union, the AFL-CIO, and the National Association of Manufacturers all dropped out of the process during the past two years of deliberations.

Members of the coalition did not have a plan for how the SCHIP and Medicaid expansions would be funded. Under pay-as-you-go, rules adopted by Democrats this Congress, spending must be offset by cuts elsewhere.

The national debate over how to deal with the uninsured has intensified in recent months, with stakeholders from all sides proposing policy changes and promising to make the uninsured an issue in 2008.

The coalition's proposal is much like the insurance industry's November 2006 plan, which called for an expansion of federal programs and pursued the strategy of using the SCHIP reauthorization as a starting point.

Several states have taken the lead on addressing the uninsured population. Massachusetts enacted a universal coverage law in 2006, and California and Pennsylvania recently announced legislative drives to cover their uninsured residents.

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Lawmakers Unveil Bill that Would Help Fund States' Efforts to Cover Uninsured

By Mary Agnes Carey, CQ HealthBeat Associate Editor

January 17, 2007 -- A bipartisan, bicameral group of lawmakers unveiled legislation Wednesday that would provide federal funding for state initiatives to provide health care coverage to the nation's more than 46 million uninsured.

Noting that Congress seems incapable of reaching consensus on legislation to help cover the uninsured—and that the upcoming 2008 presidential election will further complicate those efforts—funding state proposals might be the best way to proceed, the lawmakers said.

"Our bill authorizes grants to states or groups or portions of states to enact the strategy best suited to them," Rep. Tammy Baldwin, D-Wis., said at a news conference. "Under our plan, states have a lot of freedom to think creatively and independently."

Sen. Jeff Bingaman, D-N.M., said that most of the major efforts aimed at reducing the uninsured are happening at the state level and that the federal government should help foster such efforts, as well as help states improve the quality of health care offered and expand the use of information technology. "The principles underlying the legislation would . . . give states greater latitude and resources with which to experiment to accomplish those objectives," Bingaman said.

Massachusetts and California have recently unveiled proposals to help cover their states' uninsured and Democratic Pennsylvania Gov. Edward G. Rendell is unveiling his state's proposal Thursday.

The House and Senate bills would authorize grants to individual states, groups of states, or portions of states to fund a variety of approaches, such as tax credits, an expansion of Medicaid or the State Children's Health Insurance Program, or health savings accounts as ways to cover the uninsured. The proposals would be submitted to a bipartisan "State Health Innovation Commission," which then would present the proposals to Congress for review and funding.

At the end of five years, the commission would report back to Congress on how the states' approaches are working. As part of their proposals, states also may ask for relief from federal laws that they think complicate efforts to cover the uninsured, such as tax law or the 1974 Employee Retirement Income Security Act, known as ERISA (PL 93-406), which governs multi-state employers.

Beyond start-up funds for the commission set at between $3 million and $4 million, there is no specific funding level in the bill, said Sen. George V. Voinovich, R-Ohio, a cosponsor of the Senate bill. "I think the decision will be made by Congress: How promising is the proposal and what is the budget situation?"

Rep. Tom Price, R-Ga., a physician and House sponsor, said savings from the state proposals could be used to pay for the grants.

With spending on care in the United States reaching $2 trillion and 16 percent of the nation's gross domestic product in 2005, creating access to affordable, quality health care "is the greatest domestic challenge this nation faces," Voinovich said. But he said political pressures from the upcoming presidential election will make impossible for Congress to take action. "Dealing with this problem between now and the election is not realistic," he said.

Arthur Garson Jr., dean of the University of Virginia's School of Medicine and one of the advisers who helped Bingaman develop the bill, said it makes sense to look to states as testing grounds for ways to help reduce the number of uninsured.

"The federal government has taken little substantive action, but the states have moved in impressive ways," Garson said. "This is a way to start moving, one state at a time, toward improving our health care system."

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Powerhouse Coverage Coalition—How Much Juice Does It Really Have?

By John Reichard, CQ HealthBeat Editor

January 18, 2007 -- Analysts who have seen passions wax and wane in Washington over the decades for universal health coverage are taking seriously the broad coalition of diverse groups announced Thursday seeking dramatic action to cover the uninsured.

Stuart Altman, the Brandeis University professor who is perhaps the most famous analyst in academia when it comes to assessing such debates, opined Thursday that the coverage plan announced by the coalition of 16 of the most powerful powers-that-be in health care "is a great moderate bill which I think is what it needs to be" to succeed politically. "I think it's a very positive first step, and it's a big first step," Altman said.

Massachusetts' recent coup in bringing diverse political forces together to pass a program of virtually universal coverage in that state succeeded in large part because it attracted moderates from both parties, Altman said.

Formally known as the Health Coverage Coalition for the Uninsured, the group includes the following members: the AARP, the American Academy of Family Physicians, the American Hospital Association, the American Medical Association, the American Public Health Association, America's Health Insurance Plans, the Blue Cross and Blue Shield Association, the Catholic Health Association, Families USA, the Federation of American Hospitals, the Healthcare Leadership Council, Johnson and Johnson, Kaiser Permanente, Pfizer, United Health Foundation, and the U.S. Chamber of Commerce—a particularly noteworthy "get" by the coalition.

"The chamber is a very powerful organization," Altman said. "They now realize this current system is really killing them. They realize they're paying a huge hidden tax" in the form of higher premiums caused by inefficient spending on care for the uninsured that gets passed on to the employer, Altman said.

Small business was particularly potent in defeating President Clinton's health plan for universal coverage. That the chamber, which represents many small businesses, supports the new plan puts a powerful player behind a dramatic expansion in coverage.

Paul Ginsburg, president of the Center for Studying Health System Change, said the chamber's support is a "very positive" development for the plan, which relies on government programs to cover many more uninsured children and tax credits to foster wider coverage in private plans of adults with modest or moderate incomes.

The plan could help small businesses compete against large employers for workers because more employees in smaller workplaces would get tax breaks to buy health insurance, Ginsburg said.

Assessing the current debate on the uninsured, analysts see a greater willingness on the part of health care players to compromise if their own pet plan isn't adopted. In past debates, health care players preferred the status quo to compromise if their own particular plan wasn't adopted, said Altman, who turned that observation into what later became known as "Altman's law." Altman said that was the case the last three times a major health care overhaul was the topic of hot debate in Washington—in the Nixon, Carter, and Clinton administrations.

One of the coalition's members, Families USA Executive Director Ron Pollack, boasted Thursday that a hallmark of the new plan is that it reflects willingness to compromise. None of the players in the coalition is getting the coverage plan that is their first choice, he said.

Ginsburg said he sees that dynamic as a hallmark of the recent debate over covering the uninsured, including the new program in Massachusetts. Many of the attempts to increase health coverage in the past few years have been "trying to repeal that [Altman's] law," he said.

People are trying to apply lessons learned from the failure of the Clinton health plan, Ginsburg said. "People not settling for half a loaf has been the major reason we don't have more government programs to cover the uninsured," he said.

Altman said he thinks the coalition may represent a repeal of his law—but only as far as it goes. The plan would only cover about half the uninsured, he noted. Attempts to cover the other half would be much more likely to dispel the mood of compromise, he said. He said for example, that a broader effort would entail tax breaks for middle-class Americans to buy coverage, leading employers to drop coverage. Trying to keep that from happening could trigger attempts to mandate coverage by employers, he said, in turn causing those employers to turn against wider coverage attempts.

A major question, Ginsburg said, is: "Is this spirit of compromise going to hold throughout?" He noted that "not everyone who has a say is in this group." Big Labor is missing from the coalition. The AFL-CIO and the Service Employees International Union were involved with an earlier part of talks about joining the coalition but opted not to back the plan.

Ginsburg notes the coalition could break up over the details of how to pay for the plan, which would cost some $45 billion to cover children and an unspecified additional—and certainly very large—sum to cover uninsured adults.

Big Labor wants coverage plans to go much farther, as do other advocacy groups, including the Children's Defense Fund (CDF). Altman noted that big unions represent a strong coalition for wider coverage, so their absence is not insignificant. CDF said its own plan would cover all nine million of the nation's uninsured children while the coalition's plan would still leave some four million uninsured kids without coverage.

Conservatives may balk at the costs of the plan. "The common theme is health care is expensive and they'd like a federal bailout," American Enterprise Institute analyst Joseph Antos said of coalition members. "Everybody would like a federal bailout, but the only problem is that a federal bailout means the taxpayers pay for it. So it's just moving the money around as opposed to really getting at the hard job, which is addressing the high and rapidly rising spending on health care; there's tremendous inefficiency. These groups are really not addressing that directly."

But Ginsburg noted that a tough budgetary climate does not rule out government action to widen coverage. The last major expansion of coverage came at a time when pressures to balance the federal budget were great, he noted. The State Children's Health Insurance Program was passed as part of the Balanced Budget Act of 1997. "When there's a lot of money sloshing around, perhaps there's an opportunity."

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Preventive Care Gets Low Marks on AHRQ Quality Report Card

By John Reichard, CQ HealthBeat Editor

January 17, 2007 -- Although quality of care improved overall, preventive care got low marks in 2006 on the annual quality-of-care report card issued by the Agency for Healthcare Research and Quality (AHRQ).

Only about half of Americans got recommended preventive care on four measures of that type of treatment, resulting in billions of dollars of extra care costs, according to the report. In another annual AHRQ snapshot assessing health care disparities in the United States, the agency found that blacks received lower quality of care than whites on 73 percent of the measures of quality of care it evaluated. The agency is required by Congress to issue both reports annually.

"Much more can be done to prevent illness from occurring," AHRQ Director Carolyn M. Clancy said of the latest quality-of-care findings, which included the following:

  • Only 52 percent of adults reported receiving recommended colorectal cancer screenings. About 56,000 Americans die from that type of cancer each year, and 150,000 new cases are diagnosed annually.
  • Fewer than half of obese adults reported being counseled about diet by a health professional, even though obesity increases the risk of high blood pressure, type 2 diabetes, stroke, heart disease, and osteoarthritis.
  • Only 49 percent of people with asthma were told how to change their environment to lessen complications of the disease and just 28 percent reported receiving an asthma management plan. Asthma causes 500,000 hospitalizations annually, AHRQ said.
  • Only 48 percent of adults with diabetes reported receiving all three recommended screenings—those for blood sugar, foot exams, and eye exams—to prevent complications of the disease.

The annual report card based its assessment of the quality of U.S. health care by reviewing the nation's performance on 40 performance measures. It found that the greatest quality gains occurred in hospitals, in part because of improved treatment for heart attack patients and pneumonia patients and steps taken to avoid surgical complications. Those gains stemmed in large part from public reporting on quality-of-care measures used by the Centers for Medicare and Medicaid Services and from activities by "QIOs"—or quality improvement organizations—that contract to improve treatment in Medicare.

The disparities report card found that Hispanics received lower quality of care than non-Hispanic whites for 77 percent of the measures assessed, and that "poor people received lower quality of care than high-income people for 71 percent of the measures." "Variations were particularly apparent in the area of prevention," the agency said.

Obese blacks were less likely to be told they were overweight by their doctor or other health care providers, AHRQ said. "Colorectal cancer screening rates were significantly lower for blacks and Asians when compared with whites," the agency said. "Among people 65 and older, blacks, Hispanics and those in lower income groups were less likely to have ever received a vaccine to prevent pneumonia."

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Study Finds Medicare Drug Plan Costs Vary By State, Even Under Lowest-Cost Plans

By Matthew Sedlar, CQ HealthBeat Deputy Editor

January 19, 2007 -- Prescription drug plan costs can vary by thousands of dollars for seniors in different states, even under the lowest-cost Medicare drug plan available, according to a study published in the January issue of the Journal of General Internal Medicine.

Critics, however, said the findings were based on old data and that widely acknowledged problems reflected in that data have been fixed since the drug benefit's implementation.

Using December 2005 data from Medicare's Web-based calculator, researchers at the University of Michigan (UM) researchers looked at drug costs for four patients based on actual cases and found the results varied widely.

For example, under the lowest-cost plan available in Michigan, a 78-year-old woman in need of drugs for osteoporosis, high blood pressure, and chronic pain from arthritis and a spine fracture caused by osteoporosis would pay $4,113 for coverage under the lowest-cost plan, while in Ohio that same coverage would cost her $16,856. If that same woman picked the highest-cost plan in Michigan, it would cost $13,806 more per year, while the highest-cost plan in Ohio would only cost $1,079 more.

The study also found that depending on the type of prescriptions and the prescription drug plan, or PDP, seniors in some states might spend 10 percent of their cost-of-living-adjusted median income on premiums and copays, while seniors in another state fitting the same description might spend 20 percent.

"This shows just how high the stakes can be when a senior is deciding which plan to choose, or deciding whether or not to switch plans," Matthew Davis, a UM physician and author of the study, said in a statement. "No one doubts that the Part D benefit has helped many seniors by giving drug coverage to those who previously had none, but the level of variation among the lowest-cost plans is far greater than many seniors and policymakers probably anticipated."

Centers for Medicare and Medicaid Services (CMS) spokesman Jeff Nelligan said Thursday that "there can be [cost] variances in different states, given the different structures of distribution," such as pharmacies, "and different costs per state for drug manufacturers, pharmacies and insurers to work within." Nelligan added that geography, such as whether seniors live in urban or rural areas and the cost of living in those locations, could also explain cost variances.

According to the study, the availability of PDPs is specific to 34 CMS regions, which mostly cover individual states but in some cases, such as North Dakota and South Dakota, group states together. The study recommends further refinement of the Medicare drug benefit to "ensure nationwide balance in PDP affordability."

Nelligan on Friday said that CMS is continuing to review the study.

"The information that the researchers relied on is questionable in terms of accuracy and does not represent current findings," Mohit Ghose, vice president of communications for America's Health Insurance Plans, said in an e-mail Friday. In December 2005, "CMS was working with Part D sponsors to ensure that calculations produced by the tool were consistently reliable. The data used by the researchers reflects data problems that have since been addressed," Ghose added.

For example, Ghose said that for the case of the 78-year-old woman, the difference in annual premiums among PDPs offering the lowest-cost plans varied by less than $400 by state in 2006.

The patient cases used as an example in the study consisted of the 78-year-old woman; a 66-year-old man diagnosed with high blood pressure, high cholesterol, depression, and diabetes, with and without a prescription for insulin; and a 72-year-old woman taking medications for heart failure and to prevent a second heart attack. According to the study, costs were calculated based on the least expensive combination of generic and brand-name drugs available.

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