By John Reichard, CQ HealthBeat Editor

July 11, 2006 -- A coalition of 38 religious, provider, consumer, and other groups announced a new campaign Tuesday to build a national movement for covering the nation's uninsured children.

The effort by the liberal advocacy group Families USA, the Catholic Health Association, the Presbyterian Church, labor, education, provider, and other organizations aims to cover all of the nation's nine million uninsured children. But it also can be seen as an effort to ensure that current coverage levels do not diminish with the reauthorization next year of the State Children's Health Insurance Program (SCHIP).

Speakers at a noon press conference announcing the Campaign for Children's Health Care were not talking about simply staying put coverage wise, however. "There is no valid excuse for not covering children," said Sister Carol Keehan, chief executive officer of the Catholic Health Association (CHA).

"I've had it," said another speaker, Dr. Georges C. Benjamin, executive director of the American Public Health Association. "Enough's enough. The movement starts today."

"Covering all of our children should not be an option, it should be a given," said Dr. Matthew Levy, a Washington, D.C., pediatrician who spoke on behalf of the American Academy of Pediatrics. "Uninsured children fail to get medical, mental health, and dental services, go without prescriptions, and skip doctor visits, all of which leads to poor health," Levy said.

Even children enrolled in SCHIP or Medicaid cycle in and out of coverage, forcing them to switch doctors and leading to problems such as loss of medical records, speakers said. "The system isn't really a system, it's just fragmented care," Levy said.

Antonia Cortese, executive vice president of the American Federation of Teachers, said lack of coverage is at odds with the Bush administration's No Child Left Behind goals in education. "If children are absent because they can't get the care they need, then we're leaving children behind," she said.

"Children with untreated health conditions have more trouble concentrating in class and have higher absenteeism than children with access to good health care," she added. These problems are "magnified by the fact that there are fewer and fewer school nurses. Unfortunately, school nurses are considered a luxury, not a necessity, in these tight budget times."

Keehan cited results from a CHA survey earlier this month of 800 likely voters showing most Americans aren't aware how many children are uninsured.

She said only 13 percent named children when asked "if you were going to describe uninsured Americans, which one or two . . . groups would come to mind first." Other than children, the groups those polled were asked to choose among included the elderly, working families, and people with low incomes. According to the campaign, one of every eight Americans below age 19 is uninsured, and one of every five uninsured Americans is below that age.

"One of the main obstacles to addressing this issue is a lack of awareness," Keehan said. "Americans want this problem solved when they find out about it," she said. Eighty percent of those polled said they would be willing to pay higher taxes to help pay for coverage of uninsured children.

Sponsors offered no specific estimate of funding for the campaign. "The very diverse coalition of dozens of organizations will be offering many of their resources to support campaign efforts and initiatives," said Families USA spokesman David Lemmon.

The Robert Wood Johnson Foundation has funded a campaign for a number of years to build public awareness of the lack of coverage in the United States, but Lemmon said the problem of uninsured children is particularly timely given that SCHIP reauthorization will be a top congressional health care priority next year.

"The expiration of the SCHIP program gives us a golden opportunity to enact a permanent program guaranteeing that no American child will ever be without health care insurance," said Bill Vaughan, a senior policy analyst at consumer advocacy group Consumers Union.

But maintaining current levels of coverage in SCHIP—about four million children are enrolled—is growing more expensive every year, Families USA Executive Director Ron Pollack said in a response to a question at the briefing. He noted an estimate by the Center on Budget and Policy Priorities that if Congress freezes SCHIP funding in fiscal years 2008–2012 at the fiscal 2007 level of $5.04 billion per year when it reauthorizes the program next year, the shortfall in funding care for four million enrollees would total $10 billion to $12 billion over the five years.

Covering nine more million uninsured children would be a tall order costing many more billions than that. The campaign hopes that an online petition drive on its Web site will help build the needed support and said it also plans town hall meetings and other grassroots events around the country to build support. "This is just the beginning of the campaign," Lemmon said. "We're going to have many more people join over time."

Benjamin emphasized that there are major costs involved in not covering children. The resulting failure to get care or to postpone treatment leads to costly emergency department visits, expensive disabilities, and in the case of untreated mental illness, the expense of imprisonment, he said.

By John Reichard, CQ HealthBeat Editor

July 12, 2006 -- With quality and cost concerns paramount in Medicaid, Institute for Healthcare Improvement President Donald Berwick's message to federal Medicaid Commission members Tuesday appeared to be music to their ears: Improvements in quality ought to be your primary tool for saving money, he said.

When Berwick abruptly ended his presentation by saying "I think I'll stop there," commission co-chairman Donald Sundquist, the former governor of Tennessee, appeared to speak for his colleagues when he said, "I wish you'd keep going."

Berwick delivered a blunt message to the commission. Although the United States excels in high-tech care, other nations provide higher-quality care overall and at a considerably lower cost, he said. Health care in the United States is "approximately fair and often poor," Berwick said.

But Berwick said there is "absolutely no question" that improvement is possible. Berwick then corrected himself to say, "Dramatic improvement is possible."

Berwick admitted that he was "on a high" because of results recently reported by the 100,000 Lives Campaign he has spearheaded to enlist hospitals to retool to provide safer care. By adopting various measures—including "rapid response" teams to swiftly respond to signs a patient's condition is deteriorating, delivering better care to heart attack patients by administering beta-blocker drugs, being more vigilant about medication errors, and adopting simple techniques to prevent pneumonia among ventilator-dependent patients—participating hospitals so far have prevented an estimated 122,000 deaths, Berwick said.

Berwick added that improvements in the treatment of the chronically ill that already are in place in other nations could sharply lower hospital admissions in the United States. He estimated that some 30 percent of hospital admissions in the United States could be avoided but said hospital administrators would be "psychotic" to reduce admissions given payment incentives in the U.S. health care system.

Instead of an "event-based" system of care, U.S. health care ought to be restructured to provide payment for keeping entire populations healthy, he said. But U.S. health care is plagued not only by poor payment incentives but also by excesses of supply of certain types of services that dictate the type of care patients get in certain markets, often resulting in worse outcomes, he said. Berwick was referring to research done by Dartmouth professor John Wennberg showing geographic variations in the types of certain services around the country.

Smart organizations throughout the U.S. economy figure out how to get better results with fewer resources, but that's not the story of U.S. health care, he said. There is no mechanism now in the United States to decide on optimal allocations of hospital beds and home care services, for example, except through managing care on a population basis, he said.

Berwick said it's time for the United States to cover everyone—the nation should waste no more time in the matter and make health care a human right, he said. But at the same time, it should spend no more money than it's spending now on health care, he emphasized, and extend coverage by adopting safer, more efficient care. Quality improvement should be the basis for cost reduction—"all other industries know how to do that" and health care should too, he said.

Whether the federal Medicaid Commission will factor Berwick's views into its recommendations later this year for overhauling Medicaid is unclear. Berwick said at the outset of his presentation that he didn't know if the commission had the leverage to make the changes he is urging, but he said he would assume for the purposes of his talk that it does.

By Matthew Sedlar, CQ HealthBeat Deputy Editor

July 13, 2006 -- The Centers for Medicare and Medicaid Services (CMS) has announced a demonstration program that would allow providers under Medicare Advantage programs to offer health savings account–type plans to beneficiaries in 2007.

According to a statement from CMS, plans similar to health savings accounts, or HSAs, previously have not been available to Medicare beneficiaries. "We are giving Medicare beneficiaries the option of health savings account–type plans, as an additional choice among other health plan options in Medicare," said Department of Health and Human Services Secretary Michael O. Leavitt. "Along with HMOs, PPOs, and private fee-for-service plans, Medicare is aiming to provide a full range of coverage options so that our beneficiaries can get the coverage they prefer at the lowest possible cost."

CMS Administrator Mark B. McClellan told health policy analysts and journalists at a briefing in May that HSAs were likely to be part of the coverage choices offered to Medicare beneficiaries next year.

The accounts, which were created in the 2003 Medicare drug law (PL 108-173), allow individuals under age 65 who have a high-deductible health plan to contribute and withdraw funds to cover health care costs tax-free. Proponents of HSAs say that when patients are forced to pay more costs out of pocket, they will begin to comparison shop and request quality data, eventually driving down health care costs.

Opponents of the accounts, however, have noted numerous problems presented by HSAs, including difficulties meeting the high deductibles and co-payments—especially among lower-income Americans.

Under the demonstration program, Medicare will pay for high-deductible plans for beneficiaries and place money in the accounts, called Medical Savings Accounts (MSAs), at the beginning of the year. When the deductible is reached, the agency said, any services covered by Medicare would be covered by the plan. CMS spokesman Peter Ashkenaz said Wednesday that the amount placed in the accounts will be determined by the plan's benefit design and how much the plan thinks it will cost. Money in the account not used during the year will carry over into future years even if the beneficiary is no longer in a high-deductible plan, the agency said.

Medicare Advantage MSAs only resemble HSAs because under the Medicare law, contributions to the accounts can't be made once an individual qualifies for Medicare. However, the agency said that proposals from providers should allow CMS and health plans to develop MSA products for 2007 or 2008 that "more closely resemble HSAs."

Providers wanting to participate in the demonstration program must apply by July 21 and bids for plans are due Aug. 10.

By Elizabeth B. Crowley, CQ Staff

July 11, 2006 -- Debate over the reimportation of prescription drugs erupted during Tuesday's Senate floor debate of the fiscal 2007 Homeland Security appropriations bill, as lawmakers voted to permit drugs to be brought in from Canada for individual use.

The vote was 68–32.

David Vitter, R-La., set off the exchange when he offered an amendment to the spending bill (HR 5441) that would prohibit U.S. Customs and Border Patrol agents from seizing FDA-approved drugs brought in from another country for personal use.

Judd Gregg, R-N.H., objected to the proposal, declaring that "the practical effect of this amendment would be the customs and border patrol could not stop any drug at the border."

But Bill Nelson, D-Fla., who is running for reelection this year in a state with a large population of senior citizens, said older Americans need to be able to buy cheaper drugs from other countries.

Most seniors have some type of prescription drug coverage—either through the new Medicare Part D program or from a former employer. But under Part D, Medicare coverage is suspended once seniors have spent $2,250 on prescription drugs. Medicare picks up again, paying 95 percent of the cost, only after a senior's annual drug cost has reached $5,100.

Gregg said the amendment could carry national security threats. "If I were a creative terrorist I would say to myself all I gotta do is produce a can that says Lipitor on it," Gregg said, suggesting a terrorist could send anthrax to individuals who had ordered Lipitor.

After heated debate, Vitter modified his amendment so that it would apply only to drugs brought in from Canada.

Gregg said the Vitter's concession improved the amendment, particularly in terms of national security, but he continued to oppose the proposal, though his opposition was less forceful.

By Sarah Abruzzese, CQ Staff

July 14, 2006 -- The majority of health care opinion leaders surveyed in a poll released Friday say they believe the Medicare prescription drug benefit helps beneficiaries but that modifications are needed.

"Part D is really helping millions of people afford prescription drugs," John Rother, group executive officer of policy and strategy for AARP, said in a commentary on the survey published by The Commonwealth Fund. But, Rother said, the benefit needs to be changed to eliminate the asset test and simplify the process so more low-income beneficiaries will receive the subsidy and be covered.

Harris Interactive conducted the survey online for The Commonwealth Fund. It was sent to 1,246 opinion leaders in health policy and innovators in health care and finance and 180 responded.

Ninety-five percent of the responses from the business, insurance, and health care industry sector support the law. Those in academic and research institutions, health care delivery, and other related sectors were less supportive—56 percent to 67 percent said it was good for beneficiaries.

The majority of respondents said changes should be made to the benefit. A minority said making Medicare drug coverage available only through private plans is good for beneficiaries, while a little over one-third agree the current benefit structure—including the "doughnut hole," or coverage gap where enrollees are responsible for all their coverage out-of-pocket—will help beneficiaries most vulnerable to high drug costs.

The majority of respondents are in favor of several proposed changes to simplify the benefit. While a greater number of respondents in the business sector favored leaving in the deadline penalty for late enrollment, only 8 percent overall said the 1 percent monthly penalty for late enrollment should be left in place. The majority, 51 percent, favored extending the May 15 deadline and removing the penalty, and 39 percent favored leaving the deadline in place but allowing people to enroll in the program next year without a penalty.

The survey overwhelmingly shows support for the Medicare drug benefit, but Stuart Guterman, director of the Program on Medicare's Future at The Commonwealth Fund, said there are big differences in opinion between groups. Specifically business, insurance, and health care industry groups differ with all the others on the best way to proceed and how satisfied they are with the status quo. "The business and insurance and health care group is much more satisfied with the status quo," Guterman said.

By John Reichard, CQ HealthBeat Editor

July 11, 2006 -- Administration officials said Tuesday that their midyear review of federal spending patterns shows a sharp slowdown in the growth of federal spending on the Medicaid program. But Medicare spending is growing more quickly than they estimated at the start of the year, despite lowered estimates of the cost of the Medicare drug benefit, officials said.

The increases in Medicare Part A spending for hospital care and Part B spending for doctor and hospital outpatient care show the need to revise spending in those segments of the Medicare program, said Centers for Medicare and Medicaid Services (CMS) Administrator Mark B. McClellan in an afternoon telephone press briefing.

Annual federal outlays for Medicaid rose at a yearly clip of 12 percent in fiscal years 2000–2002 but will rise just 1.8 percent in fiscal 2006 compared with fiscal 2005, according to CMS fact sheets released after the briefing. The projected increase in fiscal 2007 compared with fiscal 2006 is 4.6 percent.

While Medicaid spending for prescription drugs has shifted in part to the federal government under the new Medicare drug benefit, even if that spending were still included in the Medicaid numbers, Medicaid spending in fiscal 2006 would rise only 5.5 percent compared with fiscal 2005, CMS said.

CMS said the slowdown stems from various factors including waivers and other joint efforts by states and the federal government that result in greater use of private health plans. The agency also said greater use of home- and community-based care rather than nursing home care is reining in spending growth.

In addition, greater use of generic drugs by state Medicaid programs and multistate purchasing pools is contributing to the slowdown, CMS said. Improved economic conditions also have slowed the rate of enrollment growth, the agency said. Among the last factors it listed—but perhaps not the least—were administration efforts to keep states from pumping up the amount of state Medicaid money that is matched by the federal government. Critics say those state tactics are no more than accounting gimmicks.

Federal Medicaid expenditures for inpatient hospital care actually are projected to drop by 0.1 percent between fiscal 2005 and fiscal 2006. While expenditures for nursing home payments grew at a 9.6 percent clip between fiscal 2001 and fiscal 2002, that rate of annual growth is projected to slip to 5.4 percent in fiscal 2006 and 4.7 percent in fiscal 2007.

A budget savings measure (PL 109-171) President Bush signed into law in February also is projected to help slow Medicaid spending growth, CMS said. The measure gives states greater power to redesign their programs.

In fiscal 2006, 16 states are projecting that they will have lower Medicaid expenditures than in fiscal 2005, the agency noted.

Medicare
The administration said it has lowered its five-year estimate of the cost of Medicare's Part D program—the new drug benefit—by $34 billion compared with its estimate at the start of the year. But its five-year estimates for Part A are $17 billion higher. The higher projection "highlights the need for appropriate incremental reforms now," CMS said.

The agency noted that President Bush's fiscal 2007 budget "proposed a limited reduction in payment growth rates for hospitals and skilled nursing facilities and performance-based payment reforms to promote quality care with fewer costly complications and unnecessary services."

But Part B outlays were a particular focus of McClellan's. He noted that the five-year estimate of Part B costs is now $30 billion higher than it was at the start of the year, an increase that he said reflects growing use of both physician-related services and hospital outpatient services in Medicare's fee-for-service program. "Overall, Part B spending increased by 11 percent in 2005," CMS said. The main reason "is increases in the volume and intensity of physician and outpatient hospital services."

The analysis noted that the Part B premium is now projected to rise 11.2 percent in 2007, to a monthly sum of $98.40. If Congress spends the estimated $13 billion five-year cost of erasing a planned 5 percent cut in physician payments next year, the premium increase will be higher, McClellan said.

Asked if the higher Part B figures weaken the case for erasing the cut, McClellan said "it does highlight the fact that we can't just keep pumping more money into a payment system that is not sustainable."

McClellan said the Part B numbers show the need to make changes to reward physicians for more efficient, higher-quality care.