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March 20, 2006

Washington Health Policy Week in Review Archive ff35509b-1872-4e11-8f80-19b896927470

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Chairman Deal Urges Caution on Health Care IT Legislation This Year

MARCH 16, 2006 -- House Energy and Commerce Health Subcommittee Chairman Nathan Deal, R-Ga., raised eyebrows Thursday when he said he intends to move cautiously on health information technology legislation this year, outlining plans for a series of hearings on the issue. But Deal's statements aren't a signal he won't move such legislation, a spokesman said.

The Senate has already passed health care IT legislation (S 1418) in the current session of Congress, and Deal has reached agreement on a bill (HR 4157) in the House with the chamber's other key subcommittee chair on the issue, Rep. Nancy L. Johnson, R-Conn., of the Ways and Means Health Subcommittee. In addition, promoting information technology enjoys strong bipartisan support in the House, all of which suggests "IT" is one health care issue on which Congress appears poised to act this year.

But Deal said his subcommittee will consider a variety of bills introduced on health care IT. In addressing the issue, Congress must avoid interfering with private sector progress toward implementing IT and reject an overly regulatory approach to the field, he said in a hearing by his subcommittee.

An Energy and Commerce Committee spokesman said Deal is committed to moving a "meaningful" health care IT bill this year, adding that it won't be the Deal-Johnson bill "word for word."

Concern over the privacy of individual medical records is one of the issues that may be prompting Deal to look beyond his own bill. Privacy advocates have voiced strong objections to a measure in the Deal-Johnson bill that could eventually end state privacy laws that are stronger than the standards adopted by HHS under the Health Insurance Portability and Accountability Act.

Democrats at Thursday's hearing picked up on that concern. Rep. Henry A. Waxman, D-Calif., like Deal, called for "caution" in moving IT legislation, saying that preserving state laws to protect medical privacy should be a "bedrock principle." Michigan Democrat John D. Dingell, the ranking member of the panel, said in a written statement that "over the past week one of the biggest security breaches occurred when PIN numbers for many top banks in the world were compromised. Yet loss of money does not compare to the irreparable damage that can result from sensitive health information, such as mental illness records, HIV/AIDS status, or genetic medical histories being compromised."

At least one privacy group is trying to enlist conservatives in its opposition to the Senate bill and the Deal-Johnson bill. Deborah Peel, a psychiatrist who heads Patient Privacy Rights, said the public lost the right to control its medical records under HIPAA and a national system of electronic access to health care records would dramatically increase that loss of privacy. Companies inevitably will gain access to sensitive personal data leading to denial of employment, Peel said.

Peel said groups ranging from the American Civil Liberties Union to the Christian Coalition share her concern over the lack of sufficient privacy protections in current legislation.

But Deal also must address the concerns of the health care industry, whose representatives voiced concern Thursday that varying state laws would undermine the efficiency of a national health data network. Mark Neaman, CEO of Evanston Northwestern Healthcare system in Evanston, Ill., said that a national system would not be "viable" without a uniform federal privacy standard. Neaman was speaking on behalf of the Healthcare Leadership Council, which represents the biggest companies in health care.

Neaman asserted that medical records would actually be better protected under an electronic system because it would track who had access to electronic records and allow for the criminal prosecution of privacy violators. Paper records are much less tightly controlled, he said.

The Deal-Johnson bill also drew criticism from Consumers Union for its language easing federal anti-kickback legislation. The intent of the provision is to allow insurance companies and hospitals to donate information technology to doctors' practices without being prosecuted for illegally inducing referrals of patients or recruitment of enrollees.

Such donations "will result in distortions of medical treatment and referral patterns, Consumers Union spokesman William Vaughan said in written testimony. "Those donating hardware and software will expect to recover their investment through increased referrals. The history of prescription drug donations and other small 'gifts' to providers shows how such policies promote the overutilization of expensive goods," he said.

Vaughan urged that Medicare payments to doctors who invest in IT be temporarily increased to help them pay for it. Those payments could later be lowered because of the efficiency gains of IT, with a "budget-neutral" effect on Medicare spending, he said.

The Senate bill would not create uniform federal privacy standards, nor would it ease anti-kickback law.

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Congress Takes Up Debate over 'Shopping Around' for Health Care

MARCH 15, 2006 -- If it's good enough for cars why not health care? House lawmakers Wednesday debated whether giving consumers health care cost information would make it any less expensive or change patients' consumption of health care services.

Proponents of the concept, known as "price transparency," say that giving consumers information about the quality and cost of medical services will help them make better choices and save money. Price transparency is also a critical element of the administration's plan to expand the use of health savings accounts (HSAs), which allow consumers to contribute money tax free to the accounts for use on health costs if they also buy a high-deductible health insurance plan.

Critics of transparency and HSAs say it will take a lot more than a price list to tackle tough issues such as rising health care costs and providing coverage to millions of uninsured Americans.

"Instead of a marketplace, we have a system that prevents patients from seeing how much their health care services actually cost. The health care system hides prices and it blurs quality," House Energy and Commerce Chairman Joe L. Barton, R-Tex., said as the panel's health subcommittee began its hearing into the issue.

But transparency in health prices "is no substitute for real coverage," said Rep. Henry A. Waxman, D-Calif., adding that individuals get the best prices when they are part of a group policy, rather than trying to cut their own deal. Waxman and others also said the movement toward transparency in health prices may prove to shift more health costs on to the consumer.

While much of the discussion on transparency is focused on hospital pricing, several Democrats on the subcommittee said the concept should be expanded to insurers and pharmaceutical manufacturers to help consumers fully understand how much health care costs.

"Two health care sectors are largely responsible for the dramatic increase in health care costs: hospital services and prescription drugs. We shouldn't treat one like a sinner and the other like a saint," said Rep. Sherrod Brown of Ohio, the panel's s ranking Democrat.

"Disclosing prices to consumers is a good thing, particularly if it is extended to prices for pharmaceuticals and for health insurance companies," said Rep. John D. Dingell, D-Mich.

Health policy experts testifying at Wednesday's hearing wrestled with the many complexities surrounding the price transparency issue. Why do many health care providers not make their prices public? Will providing pricing information make a difference if it's too complicated for consumers to understand and use? Also, what happens when providers make the decisions about what services a patient needs?

"Consumption of health care does not work like a trip to the grocery store," Dingell said. "You do not always know what items you need, or even what items are available. And, more often than not, someone else, such as your physician, is by necessity selecting the items going into your shopping cart."

Former House Speaker Newt Gingrich, R-Ga., (1977-99) called the current health care system "a hopeless mess" in need of overhaul. Giving consumers more information about what health care costs, he said, is the first step toward changes that will save lives and money.

"Outside of health care, we live in the world of Expedia, Travelocity, Craigslist, and Consumer Reports. Within minutes, any citizen can find price, cost, and performance data on an infinite number of products and services," said Gingrich, founder of the Center for Health Transformation, a Washington, D.C. think tank. "Health care is the only area of America's economy where the consumer and the provider have no idea what the good and services they trade cost."

But some analysts "are overselling the magnitude of this potential," said Paul B. Ginsburg, president of the nonpartisan Center for Studying Health System Change. "Consumers' experiences with markets for self-pay services, such as LASIK (eye surgery), have been romanticized and do not offer much encouragement as a model of effective shopping for health care services without a large role for insurers or regulation."

Separately Wednesday, the group Consejo De Latinos Unidos, which describes itself as a advocacy group for uninsured patients, announced it would begin a direct mail campaign with hospitals around the country in an effort to get the facilities to offer uninsured patients the same payment rates that managed care plans receive.

Some hospitals—in particular those with nonprofit tax status—have come under fire for charging their uninsured patients higher rates than those who have insurance. "Our main objective is to bring to an end the ugly era of hospital price gouging of the uninsured and restore public confidence in the hospital sector," said K.B. Forbes, the group's executive director.

Alicia Mitchell, a spokeswoman for the American Hospital Association, said the steps Forbes outlined Wednesday reflect "many of the things hospitals are doing to help the uninsured," such as training staff to help uninsured patients understand if they qualify for discounted pricing programs or charity care.

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From the CQ Newsroom: Democrats to Keep Up Pressure for Delay in Medicare Deadline

MARCH 17, 2006 -- Congressional Democrats are likely to keep up a drumbeat of demands over the coming weeks for an extension of the May 15 deadline for enrollment in the new Medicare drug benefit, despite President Bush's refusal two days ago to support a delay.

The Senate adopted a GOP-sponsored amendment to its version of the fiscal 2007 budget resolution that would authorize, but not require, an extension of the deadline. It narrowly rejected, on a 49–49 vote, a proposal to mandate a delay until Dec. 31.

Lawmakers of both parties have been bombarded by complaints from seniors that the dozens of competing Medicare drug benefit plans offered by private insurance companies are too confusing. GOP leaders this week spoke with Bush about their concerns over the rocky implementation of the new benefit, which took effect Jan. 1.

If seniors do not sign up by the May 15 deadline, they face escalating premium prices for each month they delay. GOP lawmakers are likely to press Bush to change his mind as the deadline nears, lest the issue continue to dog Republicans heading into the elections.

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Leavitt Says New 'Payer Power' Plan Will Lower Health Costs, Boost Quality

MARCH 17, 2006 -- There are times, it seems, when big government really can work to improve health care.

HHS Secretary Michael O. Leavitt unveiled a plan this week that would bind together the collective buying clout of the public and private sector to pressure doctors and hospitals to list their prices and disclose the quality of their care.

"People have a right to know the quality of care they are receiving and its cost," Leavitt declared in a speech March 14 to the Commonwealth Club in San Francisco. "Every consumer should have a reason to look for the best value. None of that is true right now!" he said.

Leavitt announced that government analysts will examine claims data from the Medicare, Medicaid, Defense Department, and Federal Employee Health Benefits Program so that "price and quality data will be available for each hospital and doctor."

The initiative calls for listing the total costs of particular procedures, even though insured patients pay only a small fraction of those costs themselves.

"Take hip replacement surgery, for example. It would change the health care world if people could know, before their operation, what the overall package price is going to be, including lab tests, anesthesia, rehab costs, as well as specific information on quality, such as complication rates and patient satisfaction," Leavitt said in prepared remarks.

Leavitt said "we will start with a few of the most common procedures and expand as quickly as possible."

In another phase of the program, HHS said it will analyze six metropolitan markets around the country in coming weeks. Leavitt said he will then travel to those markets, and ask that their largest employers formally declare that they will join with the federal government in a program to pressure providers to measure quality, list prices, and adopt health information technology. The effort also aims to promote health savings accounts.

As a condition of doing business with the employers, providers and insurers would have to agree to disclose the quality of their care for 20 of the most frequently used medical procedures.

Similarly, prices would have to be listed for the most common medical procedures.

"As first steps toward full electronic health records, insurers, administrators, and providers will be asked to use an interoperable electronic registration system that will do away with the medical clipboard as we know it," Leavitt said.

A fourth element of the "Payer Power" plan is to promote HSAs.

"We would like payers to make health savings accounts a voluntary option on their menu of health insurance plans," Leavitt said. "That will be a very important and a powerful step forward. There are currently 3.5 million people who have adopted health savings accounts and that trend will grow." A key reason, he said, "is that more people will buy insurance when it is $300 a month than when it is $600 a month. It's as simple as that."

The public listing of prices—on—will help the uninsured find lower prices for care, according to Leavitt. Seeing the lower prices Medicare pays for care will give them leverage to bargain with hospitals to charge less them than full price, he suggests.

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Medicare Payment Overhaul, Malpractice Revisions Likely Off the Table This Year, Docs Told

MARCH 14, 2006 -- Congress won't overhaul Medicare's physician payment formula this year, nor will it revise the nation's medical malpractice laws, a key House lawmaker told doctors Tuesday. But doctors can begin laying the groundwork in 2006 for capturing those two lobbying prizes eventually, speakers suggested at the American Medical Association's National Advocacy Conference in Washington.

Regarding the payment formula, "this is not a good year quite frankly to expect any major long-term reform," said Rep. Nathan Deal, R-Ga., chairman of the House Energy and Commerce Health Subcommittee. Deal explained that lawmakers are likely to shy away from controversy in an election year.

Under the current formula, Medicare payments to physicians will drop a total of 34 percent over the next eight years, according to an AMA estimate. Congress in recent years has blocked scheduled cuts under the formula with one- and two-year "payment fixes," and 2006 is likely to be no exception. "You probably will see us having to wrestle with another annual adjustment" this year, Deal said.

Deal also noted that House-passed revisions of the nation's medical malpractice laws (HR 5) got bogged down in the Senate last year and said the same is likely to be true this year.

But doctors can do their part to help the Bush administration move away from the current "sustainable growth rate" (SGR) payment formula, Centers for Medicare and Medicaid Services Administrator Mark McClellan told the meeting.

McClellan endorsed a policy last fall that would block cuts under the SGR and substitute them with modest increases in physician payment if doctors agreed to report data on the quality of their care under certain performance measures.

Congress did not tie higher payment to reporting data on performance measures, but CMS has announced a system of voluntary physician reporting to help build the foundation for such a system, which relies on a "starter set" of 16 measures.

McClellan urged the AMA Tuesday to encourage doctors to take part in the "Physicians Voluntary Reporting Program," saying it will give physicians valuable experience preparing for coming changes in Medicare payment and allow them greater input on how the system should be run.

By acknowledging the need to move away from the SGR system, McClellan seemed to suggest that the administration will act eventually to replace it. But McClellan hinted that doctors must hold up their end of the deal by moving ahead with efforts to help develop performance measures. McClellan said he expects AMA to stick to an "aggressive timetable" for developing more measures.

Under the voluntary program, "CMS will also generate confidential reports for your practices to let you know how you perform compared to other people in the same specialty," he said. "The results will not be made public."

McClellan also said CMS is working with other organizations to develop measures of the cost of care delivered by physicians, referring more to the development of cost measures than he has in past speeches.

Under the system, "physicians will receive clear standardized reports of the kind of costs that patients are incurring," McClellan said. The CMS chief said the measures are being developed with the Medicare Payment Advisory Commission (MedPAC) and the Ambulatory Care Quality Alliance, a consortium of government agencies, health plans, and doctor organizations.

MedPAC's March 2005 report to Congress explained the basis for developing cost measures, saying research suggests that "the nation could spend less on health care, without sacrificing quality, if physicians whose practice styles are more resource intensive . . . provided fewer diagnostic services, used fewer subspecialists, used hospitals and intensive care units less frequently as a site of care, and did fewer minor procedures."

Savings could flow from measuring the resource use of individual doctors compared to their peers or to what medical literature recommends, MedPAC said. Doctors would be given this feedback, allowing them to adjust their practice styles. "When physicians are able to use this information in tandem with giving this information on their quality of care, it will provide a foundation for improving the value of care received by beneficiaries," MedPAC explained.

AMA members also heard from Sen. Hillary Rodham Clinton, D-N.Y., who pitched a proposal for ending the stalemate over medical liability reform based on the "Sorry Works" program at the University of Michigan's health care system.

Under the system, doctors receive liability protections for promptly disclosing medical errors, apologizing to the patients harmed, and entering into a system of quick compensation of patients. Errors are analyzed to determine how systems of care can be changed to prevent their recurrence. Clinton said the system has sharply reduced the number of suits filed against the University of Michigan and their associated costs, while helping to reduce medical errors.

Under legislation (S 1784) introduced Sept. 28, 2005, by Clinton and Illinois Democratic Senator Barack Obama, HHS would give grants to foster adoption of such systems throughout the country.

AMA however, has been focused on establishing national caps on pain and suffering and punitive damage awards. Clinton called that a "Band-Aid" approach that doesn't get at the root of the problem of rising malpractice costs, but retreated somewhat when a questioner vigorously defended a California law on which HR 5 is based.

The physician said malpractice premiums are much lower in the state but Clinton countered that other insurance reforms accompanying California's cap had much to do with lower costs. "I am not saying caps shouldn't be part of the solution but it's not the only solution," she said.

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Study Finds Americans Receive About Half the Care They Need

MARCH 16, 2006 -- Americans received about 55 percent of the recommended medical care they need, regardless of their race, sex, income, or where they live, according to a new RAND Corporation study.

The findings, published in Thursday's edition of the New England Journal of Medicine,, also found that blacks and Hispanics fared better than whites on routine medical care and that women were more likely to receive preventive medical care.

The study "tells us that the U.S. health care system is unreliable and cannot guarantee that patients—rich or poor, white or black, insured or uninsured—will receive the right care at the right time," said Elizabeth McGlynn, associate director of RAND Health and the study's senior author. "We need to fundamentally redesign the health system to ensure that no matter who you are or where you go for care you will get what you need."

The study, billed as the largest and most comprehensive examination conducted of health care quality in the United States, found that while some disparities in care do exist they are small relative to the gap between the medical care individuals need and what they are actually receiving.

The study's findings add new information to the ongoing debate over race and disparities in health care treatment. A 2002 Institute of Medicine study, for example, recommended increasing awareness about racial disparities, based on findings that racial and ethnic minorities experience a lower quality of care and are less likely to receive routine medical procedures—even when insurance status, income, age, and the severity of medical conditions are comparable.

The RAND study was funded by the Robert Wood Johnson Foundation. Nearly 7,000 adults in 12 nationally representative metropolitan areas participated in the study, which evaluated performance on 439 indicators of quality for 30 acute and chronic conditions such as urinary tract infections, diabetes, asthma, high blood pressure, and heart disease, along with preventative care. Individuals participating in the study had seen a provider at least once during the previous two years.

Insurance status had no real effect on the quality of care provided, the authors noted. When all patients have equal access to medical care, disparities in care according to race or ethnic group are often reduced or even reversed, they said.

Findings of the report include:

  • Women received a higher proportion of recommended care than men and were more likely than men to receive preventive services. Women, however, were less likely than men to receive needed acute medical care.
  • For routine medical care, overall quality scores for blacks were 3.5 percentage points higher than for whites. Overall quality scores for Hispanics were 3.4 percentage points higher than for whites.
  • Blacks had higher scores than whites for chronic care—61 percent vs. 55 percent.

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